12 Customer Retention Mistakes that are hurting your business

As Bill Gates once said, “Your most unhappy customers are your greatest source of learning.” No business is immune to unhappy customers. But before you start learning from unhappy customers, you first need to understand customer retention and stop making mistakes that are hurting your business.

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Here are 12 customer retention thoughts to get you started:


1. Stop ignoring customer feedback

You can’t learn anything if you don’t take action. If a customer leaves you feedback, make sure you follow up with them and make sure they feel listened to. Use the feedback to create a better experience for all your customers.


2. Stop taking customer feedback personally

Take a holistic approach to customer feedback. Customers never leave feedback because they want to personally attack you, they leave it because they are upset and want their problem resolved or service improved. Learn from the feedback so you can make sure it doesn’t happen again.


3. Stop setting customer expectations too high

You can often set the bar way too high when trying to close a deal or impress a customer. Make sure you set customer expectations appropriately right from the get go, so you can ensure both your customer and your company are happy with the level of service being offered.


4. Stop taking loyal customers for granted

Loyal customers are your biggest brand advocates. They are the customers who are telling friends about your company, referring new business and refusing to buy from competitors. You need to remember to maintain a high level of service for these guys, even if it seems like they’ll never leave. One slip up and you could lose one of your company’s biggest assets (a loyal customer).


5. Stop using automated machines

One of the biggest customer retention mistakes a company can make is to use an automated phone or email system. Nothing annoys a customer more than listening to long automated recordings that keep them waiting and leave them disappointed. Remember this saying..?

All things being equal, people will do business with, and refer business to, those people they know, like and trust.

No-one trusts a computer so don’t use one to automate your customer service.


6. Stop using long, boring customer feedback surveys

You wouldn’t spend 10 minutes of your life filling out a long and boring survey at the mall would you? So why put your customers through that? Customer feedback surveys are a great way to get actionable insights into how your customers feel about your service, but it’s important to make them short, quick and relevant. Read more about how to write a kick-ass customer feedback questionnaire.


7. Stop ignoring your competitors

You may think you’re better than your competitors, but I can guarantee they are contacting your customers and trying to make them switch. Anne Miner from The Dunvegan Group believes, ‘the way a customer views their competition’, as one of three key factors that determine how strong a bond a company has with their customers. If none of your competitors are perceived as to be better, there is a lesser likelihood the customer will leave. Make sure you are keeping an eye on your competitors and try to ensure your perceived service is better than theirs. You can do this by using some of these 18 customer loyalty building strategies.


8. Stop measuring customer satisfaction

A satisfied customer isn’t a retained customer. Research from The Dunvegan Group shows that 20% of customers who said they were ‘satisfied’ ended up switching providers to a competitor. A better measurement of how likely you can retain a customer, is customer loyalty. A loyal customer is one that will die before switching to a competitor, a loyal customer will travel five miles out of their way to buy from you over a competitor. Start measuring customer loyalty, not customer satisfaction.


9. Stop forgetting special occasions

If you’re not sending birthday emails or cards, you’re missing out on an opportunity to strengthen a customer relationship. Strong customer relationships lead to strong customer retention. Put a reminder in your CRM for when your next customer’s birthday comes up and remember to send them something special. Try being creative by sending them something that’s fun, but also links back to what your business does.

Related: 9 customer retention strategies that work


10.  Stop focusing so much on customer acquisition

It costs seven times more to acquire a new customer than it does to retain a customer. Annie Miner found that their customer care and retention programs produced a return on investment of 10:1 or higher
. What does that equal in actual revenue? We’re talking thousands of dollars, sometimes millions! You must look to allocate some budget to customer retention.


11.  Stop discounting

Trying to keep customers by offering discounts is a short slip-n-slide to failure. What is that telling your customers? You’re devaluing your service and basically telling them that it’s not worth what they were previously paying. Instead of discounting, offer guarantees or added value. For example, try offering a free month to compensate the last month’s failure… that is a much better way to motivate a customer to stick with you.


12.  Stop being reactive

Focus on stopping problems from happening, before they even happen. Taking a proactive approach to customer service means putting systems in place to predict problems before they become customer facing headaches. Predictive churn modeling can help a company develop a better understanding of the steps and stages that create customer churn. Read more about predictive churn modelling.

Gordon Tan

Gordon Tan is an entrepreneur based in Australia who has started and sold multiple technology companies with a combined value of $150m. This included a client satisfaction benchmarking platform which gave him first hand insight into the best practices of over 6,000 businesses. After retiring at 35 he is now a recognised thought leader on winning and retaining clients - His two passions: making clients the heartbeat of a business no matter what the product or service and this blog.

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