According to KISSMetrics, 71% of consumers have stopped buying from a company because of poor customer service. Whether or not you tell your customers that you care about their experience with your brand, their perception is reality when it comes to your bottom line.
While it’s common knowledge that customer retention is much cheaper than finding new customers, many (perhaps most) companies focus on customer acquisition, even though it’s around 7 times more expensive.
As the corporate leader, you may be obsessed with business results like revenue and market share – metrics that reflect your entire organization’s efforts. But as the Harvard Business Review points out, metrics that measure the culmination of your entire corporate strategy are ultimately unmanageable. The same can be said for sales objectives.
What you and your sales teams can directly manage, however, are sales activities. And, a key sales activity you can manage and track is how well your sales teams clientele. The benefits of investing in a sales activity like clienteling include repeat business, referrals, and long-term relationships with your clients.
It’s not enough to attract customers to your stores. You need to build relationships with them to ensure they return. If this sounds labor-intensive, don’t forget that it’s cheaper than finding new ones.
That’s the core of clienteling: identifying key clients and strengthening your relationships with them in specific ways to generate more frequent purchases.
However, in an increasingly technological and traffic-driven retail industry, the art of maintaining a clientele has often been lost in the shuffle. This is especially unfortunate, considering how controllable that sales activity is, and how easily it is to create tangible, measurable strategies to improve it.
While every customer should be treated well and given engaging experiences, your loyal customers, about 20% of your customer base, produce 80% of your business. With that in mind, the cost of replacing vs. retaining a customer, particularly a loyal customer, may be much higher than the factor of 7 I cited above.
If you increase customer retention by even a few percentage points, you will significantly increase your revenue. But clienteling doesn’t stop at customer retention – it’s also designed to cultivate passive customers into loyal ones, further boosting your long-term profits.
The question isn’t “Can we afford to invest in this?” You need to ask yourself, “Can I afford not to?”
Here are some key clienteling strategies that will build customer retention and give you a significant return on your investment.
Treat your best customers even better.
You need to know your VIPs and what they like. Why do they shop your brand? Is it for better sales? Clearance? Exclusive offers and services? When you identify that customer, communicate it throughout your entire enterprise.
Premium retailers like Ralph Lauren use excess merchandise as a way to create exclusive clearance shopping events for their VIPs. Marc Jacobs provided access to behind-the-scenes footage and exclusive content from this year’s fashion week in New York. Many restaurants and culinary stores like Williams-Sonoma offer cooking lessons or event planning.
The clienteling technology you use to support these customer experiences will allow you to track their effectiveness and improve performance company-wide.
Use technology and apps to support, not replace, your customer-facing efforts.
Neiman Marcus’s clienteling app has elevated the idea of keeping a clientele book. Store associates carry smartphones and are alerted when one of their customers enters the store, complete with a Facebook profile photo for visual identification. They also have the customer’s previous purchase histories and preferences automatically synced.
It’s clear that Neiman Marcus uses these tools to strengthen their personal connection and relationship with the client. In one month alone, store associates sent and received over 200,000 texts with customers.
Teach your customers.
Of course, your goal is to create easy-to-use products or straightforward services. But you can also achieve that point of difference by offering training for your customers.
Apple supplements their already intuitive designs with training sessions. Sephora has makeup artistry consultations. Yammer offers seminars dedicated to user training at business conferences.
Investing in a retention-oriented clienteling plan for your customers directly impacts manageable sales metrics, and empowers your sales teams with activities they can directly control to meet sales objectives and drive business results.
Whether you know it or not, nearly all of the customers who leave your business would say that your company could have avoided it. But your customers won’t tell you that they’re leaving before they go, let alone why.
Customer intercept surveys will give you an unbiased view of your customer’s experience in real time. You’ll have the data you need to create the clienteling strategies that will build your loyal customer base and retain the revenue they bring you over time.