It’s well-known that keeping customers is much more cost-effective and profitable than securing new clients. Harvard Business Review estimated that customer acquisition is 5 to 25 times as expensive as customer retention. What’s more, a Bain & Company study found that increasing customer retention rates by a mere 5% boosts profits by 25% to 95%.
But awareness and action are two different things. The fact is retaining best customers remains a challenge for sales and marketing professionals, leading to wasted time and money.
What to do?
Two solutions have helped my company, Stirista, achieve a 95% customer retention rate and should work for your business:
- Turn every employee into a customer-facing one. That means marketers, sales professionals, operations people, and analysts all work in tandem to interact directly with customers – eliminating or greatly limiting involvement of customer service or account representatives.
- Implement a robust order-tracking system, in addition to a CRM or within your CRM, and train your whole company on it. Thus, additional bits and pieces of information about prospects and clients can be input there, making it a true ABM model.
Let me explain each one.
Put your whole team in a customer-facing role
In our first year of business, a painful incident prompted us to take this action. The CEO of a newly acquired customer canceled a $15,000 order after it became apparent that our account manager hadn’t understood the agreed-upon email marketing automation project and hadn’t accurately reflected our strategy to the client.
That’s when I decided to have the people who do the hands-on client work interact directly with customers. Such employees make up 75% of our team. We use account managers and customer service reps on only a very limited basis.
Why does this approach make sense?
The biggest reasons are speed and ability to offer a seamless customer experience. The customer and the vendor’s staff engage in meaningful communications and save time by not having to loop in an intermediary – a glorified order-taker – who may not understand the customer’s needs or how to address them. Let the person closest to the work get close to the customer early on.
How to hire the best customer-facing employees
First, seek strong writing and other communications skills. If someone can string together a cohesive, compelling marketing email, company training can teach the product knowledge. Before hiring, we test attention to detail using Culture Index and administer a technical aptitude quiz that measures problem-solving capabilities. After hiring, we offer employees a customized module of Sandler Training’s Strategic Customer Care training and Customer-Centric Selling.
These steps are likely to foster loyalty through excellent customer service, as well as long-term working relationships between a given customer contact and a vendor employee, due to employee longevity. My company has experienced virtually no turnover among customer-contact employees.
Establish and follow systematic order tracking
Along with providing the essential human touch, operations employees need to use an insightful order-tracking system and help their customers access it.
Four years ago, my company implemented such a system to meticulously monitor every customer order. As a result, we deliver more than 99% of our orders on time.
What elements should your system include?
Our robust tracking system, a customized adaption of the free osTicket system, monitors every inquiry, answer and code used to provide that answer. Most CRMs offer in-built solutions as well. How you do it is less important than that you train everyone to use it. And you have to make sure they all use it; otherwise the system falls apart. These records date to when we put the system in place.
A couple of helpful implementation tips:
- One way to prevent rogue employees who have their own style is to tie accounting processes to the tracking system. Accounting should refuse to invoice anything unless there’s a ticket made about it on the ticket system.
- While many companies have sales training, it is amazing how few small and mid-sized companies have customer training classes. Don’t assume an employee knows your process or even knows how to answer a business call. Spend the first week doing nothing but training and job shadowing. It is well worth it that new employees understand how the company works. For a Stirista employee’s first two months on the job, an experienced operations person looks over all of the new hire’s communications and offers feedback.
How to use an order-tracking system most effectively?
The tracking system automatically generates a web URL for the client. This is one feature that’s typically not available on CRM add-ons and why it may be a good fit if you’re looking to promote transparency as a core value.
Shifting your customer care approach and establishing or enhancing order tracking will require some time and financial resources. But the investment will more than pay off when you consider the cost-effectiveness of providing superior service to keep existing customers versus acquiring new clients.
Ajay Gupta has served as CEO of Stirista since founding the company in 2010 at age 26. Without accepting external funding, Ajay has overseen the data-driven, marketing services company’s rapid year-to-year financial growth as it has progressed from two employees, working out of an apartment, to a 41-person team spanning three continents. He has been named to the San Antonio Business Journal’s 40 Under 40 list, and Stirista has won a DMA Silver ECHO award and a third-place DMN Award. You can follow Ajay on Twitter at @realAjayGupta.
