The cost is 10 times more to win a new customer than to keep an existing one. Once you win them, what maintains their loyalty?
The multi-facets of account management customer service consistently factor substantially.
Focusing on customer loyalty is an efficient process; marketing to customers who are engaged with your brand, makes it manageable to capitalize on their experiences with your company. Retention becomes a sustainable business model that’s key to profitable growth. The proof is in the numbers: according to studies done by Bain & Company, increasing customer retention by 5% can lead to an increase in profits of 25% – 95% (margin adjusted), and the likelihood of converting an existing customer into a repeat customer is 60% – 70%. In comparison, the probability of converting a new lead is 5% – 20%, and is a costly, time-intensive endeavor.
You’ll notice the impact of attrition (client turnover) costs immediately, necessitating the need for (rapid) replacement of lost revenue resulting from these lost clients. Lead generating marketing is time and capital intensive; no way around making the necessary investment for growth. Factoring the additional emphasis/cost on brand awareness to bolster lead gen, the realization of the low cost of keeping the customers you have versus replacing those departed encourages investment in loyalty-enhancing actions. The profitability’s evident.
Getting mathematical, you can determine retention by using this formula: Retention rate = ((CE-CN)/CS))100. CE = number of customers at end of period, CN = number of new customers acquired during period, and CS = number of customers at start of period. Say you start the fiscal year with 200 customers and lose 20 of them, but gained 40 new ones; at the end of the year you have 220 customers. 220-40 = 180. 180/200 = 0.9, and 0.9 x 100 = 90. The retention rate for the given period was 90%. It is beneficial to track retention rates your company can put their customer retention metrics into perspective and measure results over time. Plug-in your numbers, factoring their revenue and profitability weighted value to you, for your impact revelation.
Maintaining customer loyalty effectiveness depends on your sales, account management, customer service and accounts receivable staff having access to the right customer information, all the time. Both in being proactive, and with resolving customer issues, accomplishing either often requires accessing information that’s spread across multiple departments and business systems. Your representatives may need to look up order history, locate invoices or statements, verify facts and then, perhaps, email copies to customers. If this information is stored in a mix of paper format, unlinked business systems, or on staff’s desktop and mobile devices, it will involve looking through numerous disengaged paper and electronic file storage locations. This manually-driven process is prohibitively time consuming and impedes resolving customer issues, along with any successful new business activities. Not having documents containing relevant information, readily available when it’s needed, will irreparably damage relations and erode loyalty.
There’s new light on loyalty with account management customer service. You can add real-time, dynamically-populating document management capabilities to your enterprise resource planning (ERP) and line of business systems, all database-linked together with shared information accessible through an enterprise content management (ECM) program. This will give your entire team the ability to immediately view all related data per customer and transaction, along with analysis capability to spot both difficulty and opportunity. This automates the process, unifies your customer-facing departments, and positively impacts loyalty from a decidedly quantitative, attrition-ebbing vantage, one that relates well with interpersonal client relationships.
Functionally, your team can create, capture, manage, archive, retrieve and distribute documentation directly from your current system’s screens. A flexible workflow tool within ECM allows documents to be dynamically routed (internally or remotely) for reviews and approvals in a secure manner, based on your specific business processes befitting your company’s culture. ECM provides these capabilities via direct business system integration, adding paperless process management directly to all systems throughout your organization.
Consult an ECM provider to facilitate a transition from your manual document management and workflow to a paperless process management environment. Let them assist you to minimize the time it takes to resolve customer issues, improving satisfaction, loyalty and opportunity. It’s a two-way path, both leading in beneficial directions: your customer’s contentment, and their commitment to you.
About the Author
IntelliChief LLC’s Tim Nissen has built businesses supporting manufacturing, business continuity and document management.