“Whether you’re selling a sophisticated SaaS or running a lemonade stand, you know how painful it is to have a customer leave you, only to run to the arms of the competition,” says Neil Patel, a digital marketer, analytics junkie and the co-founder of KISSmetrics, a provider of customer analytics software.
In a blog at kissmetrics.com, Patel offers five tips for turning customer defection into a thing of the past:
Know your customer. You should know your customer like you know your best friend. (After all, they are kind of like your best friend. Sort of.) The first step here is developing a persona that is comprehensive enough to display the customer’s motivation, hobbies, types of friends and any other features that may affect the selling process. In addition to likes, Patel says a persona should include possible risks. What lines should not be crossed? What topics are sensitive? And most importantly, what are your customer’s motivations, especially negative motivations that may make them leave?
Know your competition. Your first goal is to discover which of your competitors the customer prefers, and why he prefers it. Finding out who your customer is switching to shouldn’t be hard. Just ask. Understanding their motivation, however, can be trickier. They may say “better price” or “friendly service,” but it’s up to you to really understand the deeper why.
Beat your USP into their heads. Your unique selling proposition is the heart of your business. It’s the very reason why your customers decided to buy from you in the first place, and the reason why your customers stay with you. If you don’t have a USP, make one.
If your USP is fuzzy, sharpen it. If you have a passive USP, make it ferocious. Once you’ve unleashed your USP, don’t back down from it.
Make your customer spend more. One way to hold customers tight is by upselling. A prospect that decides to give you a try often buys into a lower-priced offering. The next goal is to get them to spend more. When customers spend more money, they are making the product more valuable to themselves. Customers experience the tug of perceived value. They value your product even more if they spend more money on it. They are further invested in the product, and it is harder for them to leave. If you encourage upsells, add-ons and continued memberships, you’ve defended against defection.
Incentivize them in exchange for action. Reward your customers in some way, a gift, a rebate, or added value. Make it legitimate and desirable. Incentivization alone is powerful, but Patel proposes that you incentivize them in exchange for an action, such as a referral.
Customer defection at some level is unavoidable. Once you identify the causes of customer defections, produce and manage solutions so you don’t lose more. Develop and sharpen your flexibility so you can initiate an appropriate solution. Take advantage of positive factors that you can use for retaining customers and work toward enhancing them.
