5 Steps to Leap ahead of your Competitors…Focus on RETENTION with ACTION
There probably isn’t a business owner or top executive on the planet who hasn’t heard (and believes) it is always easier to “keep a customer” that to “acquire a new one.” Since this is such common knowledge, why is it most companies (almost 80% according to Forbes research) don’t focus on RETENTION?
I find it to be one of the biggest areas that gets the traditional “lip service” when it comes right down to it…lots of people “saying” they care about their customers and want to do everything they can to retain them but very few “doing” anything to increase retention rates. Why is that? This is one of the questions I hope bothers you as well if you are a top executive.
When you think about this from a personal perspective, if we knew something was so critical to improve our lives, would we give it lip service and ignore it or would we act on it? Most of us would act on it if we knew it was a proven approach to improving something. We would take action…we would make it happen as part of our lives. Apparently this isn’t the case when it comes to RETENTION.
So we have two choices…we can continue to “act” like we care or we can take action and “show” that we care about it. This represents a HUGE OPPORTUNITY in almost every market!
The OPPORTUNITY with RETENTION comes down to the one simple word…ACTION. If you want to seize this opportunity, take action. But not just “random actions”…strategic and calculated actions that move your company closer to the goal of higher levels of RETENTION.
Sometimes leaders get the first part right…they want to focus on Retention. However, they approach the “action” aspect of it without a solid plan or direction so they end up wasting much of their time and resources. I personally have seen over the years many leaders who get it, buy into it, want to do something about, and take action…but the WRONG ACTIONS. They throw mud at the wall and hope it sticks…they put random actions in place that have either been suggested to them (internally or from consultants) or they came up with on their own. While this might feel like they are doing something positive about retention, they aren’t. In some cases, they are actually making it worse for their customers because now the customer doesn’t know what to expect and so they get confused. And when customers are confused, they leave…they aren’t retained…which was the original goal.
While this all might sound like doom and gloom, it actually represents a tremendous opportunity for those who understand this issue and want to take a more strategic view (and actions) toward making Retention become a reality in their organization.
Let me share 5 ways companies can change this from a “random act” to one that is “strategic and focused.” This is where the opportunity lies for you and your business when it comes to leading your business to a model of RETENTION with ACTION…
1. START WITH WHY — Before you can really begin this type of effort it’s critical to understand “why you want to increase and focus on retention.” I’ll give you a hint…it isn’t to make more money or increase margins…that is a result, not a why. Figure out your “why” with regard to retention and you will have a strategy that you can put structure (and actions) around to accomplish it. Caution: this isn’t a quick one-hour exercise…this usually takes me at least a half to full day of discussion with the leaders in a company because it is so critical to understand BEFORE you jump into defining your actions. Spend the time here and you can save time as you develop the actions. It’s the old Abe Lincoln quote, “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”
2. DO SOME DISCOVERY OF YOUR CURRENT SITUATION — After you know why you want to increase retention as a strategic component of your business, find out why it hasn’t happened so far and what you think are some of the “root causes” to why this didn’t happen. This isn’t designed to find fault with your people but to figure out what is taking “priority” over retention. Everything in a business is done based on priorities (and risk vs. opportunity) and somehow other things have worked their way in front of retention…what are they and how did they get there? This is a very helpful exercise to figure out what the organization “feels” it has put in front of customer retention and is more important.
3. DISECT YOUR CURRENT CUSTOMER EXPERIENCE — this is most likely one of the primary culprits of you not having a model based on retention. Often times I find through my investigation with a client that it is their customer experience that is causing customers to not “stick” and look for other alternatives. While there may be issues with your people, products, services, processes, etc., the experience you deliver to your customers is usually at the heart of customer dissatisfaction and defection rather than retention. The customer experience is a critical element to retention. Without an experience that delights the customer, it makes retention much more difficult. Regardless of what level of retention you want as a company, the customer experience has to be firmly in the center within your business…it is the true differentiator today.
4. CREATE A RETENTION STRATEGY — Now that you have some solid information about what is going on inside the organization, you have the ability to design your strategy with regard to retention. You now have the foundation for creating a “Retention Strategy” which will become part of the heart and soul of your organization. This strategy will drive tremendous opportunity and change inside your organization when executed correctly and consistently. Caution: this isn’t an “initiative” like a marketing campaign or sales focus; it is at the core of “who you will become.” This takes careful planning and focus or it won’t deliver the results you want or expect. This is the start of what separates the “differentiated winners” that “customer’s love” as opposed to every other company slugging it out in the commodity (competitive) wars. Like the discussion of “Why” in number one above, this can take up to a day of planning to get it right…but it’s well worth the investment of time and resources to get it right.
5. DEVELOP SPECIFIC ACTIONS TO EXECUTE THE STRATEGY — This is where the “rubber meets the road” and you actually make change happen inside your organization. Once you have a solid strategy in this area, now you can identify specific action steps required to make this become a reality for your organization. These actions will involve change. If they don’t, you won’t end up with anything different than what you have currently. Putting together the action plan is where many companies start…you notice it is last on my list. The order of developing the action plan is critical to the success of your strategy. Just keep thinking of Abe Lincoln and his saw sharpening and you’ll stay on track.
BIG CAUTION…don’t let this get “neutered by committee.” Don’t let a committee of “yes people” design these actions to make others feel good…this won’t change anything. Find people who truly want to lead change that will make your business truly different…actions you can present to your customers that clearly demonstrate you care about them as a customer. Actions that show them, without a shadow of a doubt, you want to reward them for being your customers. Demonstrate how you deeply care about them staying with you because you care so much about them.
These 5 Steps will get you well on your way to creating a truly differentiated and RETENTION BASED BUSINESS your customers love working with…because it is now all about them and not you. You also will be creating a business your CUSTOMERS WILL LOVE TO TALK ABOUT to their friends and colleagues. They will tell others how awesome you are and how much you care about their experience…because it will be designed with them at the center.
A Customer Retention Strategy is an example of what CUSTOMER OBSESSED COMPANIES develop and deploy. And they are the types of businesses you and I love to work with and buy from. Are you ready to draw a line in the sand and stop paying “lip service” to CUSTOMER RETENTION? If so, I would be happy to talk with you in more detail and give you some more helpful insights that will get you pointed in the right direction. With close to 80% of the companies still delivering “lip service” about RETENTION, there is an INCREDIBLE OPPORTUNITY in front of you RIGHT NOW!!
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