Too many companies are under the misguided notion that replacing large percentages of their customers every year is a norm that they must expect. In fact, substantial client turnover is one leading indicator that there are hidden problems in your business.

One of the strongest signs of a good business model is customer loyalty. The true test of how well you run your company is the percentage of customers who continually come back for more of your products or services. In today’s Internet-savvy economy, the complexity of competition has made customer retention infinitely more challenging.

In many businesses, you can see patterns. One company I worked for was great at getting new clients. They had a lot of hype in their marketing about how they were different and would add more value to their products and services than their competitors. Thus, they were able to charge premium prices. But you could see that every 2 to 3 years, their big clients would start slipping away to the competition. The message was clear: they were not delivering on their promises, so their existing customers were not willing to pay the premium prices based on hype.

A company I am working with right now was seeing a constant churn in their client base. As quickly as they brought in new clients, the old ones would start slipping away. Then they would have to go back to the old customers to reacquire them.  What we learned was that they had the wrong type of employees and processes in their customer support department. The department was set up to take and process orders. What was needed was people that knew how to farm and build accounts as inside salespeople. The customer base was under constant siege from competitors, and if someone from my client’s firm was not calling them regularly to tuck them in, the competition was taking them away. In addition, processes needed to be built so that customers could feel and see the difference between doing business with my client versus the other company. By making some minor tweaks and one personnel change to set the example, customer retention is way up, and each account is growing steadily.

Howard Shore is a business growth expert that works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at (305) 722 7213 or [email protected].

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