How to Focus on Customer Retention to Acquire New Accounts

Attract New Customers

More often than not, sales and marketing efforts are centered around customer acquisition. But by focusing only on getting new customers, businesses may not be optimizing the customer experience for their current ones. It seems crazy but salespeople and leadership are surprised when customers leave either because they aren’t getting what they were promised, or a competitor has been nurturing the relationship when your team has not.  

Many organizations don’t realize that acquiring new customers costs five times as much as retaining current ones. So why not focus on customer retention? 

The primary reason is market share or market dominance. Gaining new customers quickly helps your company dominate the market. The problem with that is if they leave out the backdoor as fast as they come in the front door revenue and profitability are hurt, not to mention your reputation.  

Since most companies want to do both, acquire and retain customers, why not use one to do the other.   

How can companies focus on leveraging their existing customers to grow faster while minimizing costs? Sneak peek – loyal customers are willing to make introductions, which completely changes your prospecting efforts and increases deal velocity. Think less cold outreach and more conversations with people who can buy.

But before we can get to that, you must get your team to change their focus from acquisition through cold outreach to getting introduced to decision-makers by key influencers at your existing accounts. That won’t happen unless you cultivate loyal customers.

The Endless Customer Acquisition Cycle

What happens once your sales team lands a new customer?

The sales team closes a deal. There were a lot of people involved in making the decision, and it was maybe tens of thousands of dollars – maybe millions. And you’re thinking, “This is fantastic! They closed the deal, and we have a prestigious new customer.”

What’s next? Accounting sends the invoice, and all the paperwork is done. But then, what does your team do?

Are you providing ample onboarding? Are you delivering on all that you promised? Are you making sure your customers are being taken care of after they sign?

Or are your customers left on their own to call a customer support person if they need help. Does your company rely on the customer to call if they have a problem? Do you have a completely reactive process or is it proactive?

If there is no team in place to properly onboard and care for the customers proactively, once you land them, you risk losing them to your competitor the next time they purchase or worse, face complaints on the internet.

The Real Cost of Getting New Customers

Your organization has already spent time and money acquiring your current customers, and your goal is to build a long-term relationship with them and cultivate loyalty. So, if you’re not making sure your customers’ experiences are top-notch from start to finish, you’re basically wasting all the time and money you’ve spent to acquire them.  

On top of that, it’s going to cost even more to fill that void with new customers. Research shows that “It is 16 times as expensive to build a long-term relationship with a new customer versus simply cultivating the loyalty of an existing customer.” 

This may seem obvious, but a Forbes Insights Study showed that less than a third of business executives consider customer retention a priority. If you want to save money, on customer acquisition and increase sales referrals, it’s time to make your current customers your priority.

How to Get Started Delivering Excellent Customer Service

So, what happens after you close a deal? Of course, you send the invoice and do the paperwork but then what happens?  

• Does the salesperson send a thank you to the decision-makers? 
• Do your senior leaders send a thank you? 
• Does your team provide onboarding? 
• Do you deliver as promised? 
• All the above. 

All the above is the right answer of course. A thank you is just the beginning but an important one. One of my clients and I were discussing different ways to thank your customers, and one of the things customers seem to love is just a simple hand-written note. It could be a simple notecard, but my favorite is to send notecards with photos of my area taken by a local photographer.  

Have the right people from your company send a thank you note to each of the decision-makers.  

One of the nicest things you can include in this note is a compliment. Below is an example.

Note: Thank you for your business. It was a pleasure working with you and your team. They did an outstanding job of getting us all the information needed to build out the customization. I look forward to a long successful relationship.

Send thank-you notes. Include compliments. Easy! 

If you aren’t doing all the things on the list above, commit to something you will do, and it will improve your customer retention.

Don’t Stop at Thank You

Thank you is a start, but it is not enough. You want to be sure your team continues to do things throughout the lifecycle of the customer that will encourage loyalty and make them a customer for life.  

You don’t want them looking around every time their contract renews or when they are in need of additional products or services you can provide but didn’t tell them about.  

We want customers to think of us as a resource. We want them to partner with us. To tell us what they need, not just now but in the future, so we want customers for life. This means moving from transactional, to satisfied, to loyal. Not all those who buy from your company will become loyal but decide on what percent of business you want that is transactional, versus what percent you want from satisfied and loyal customers.  

Satisfied is not enough. For example, I go to the store or a website and buy a water bottle. It’s good, I like it, I’m satisfied. But then I break it. Do I go back to the same place and buy the same one? Probably not. I’m going to look around and see what else is out there. I was satisfied but not loyal. 

Now, if I buy a water bottle and it’s so fantastic, I love it so much and I had a great customer experience with the purchase and there’s a place where I can register the water bottle online, then when I break it, I’m going to go right back to the site and say, “I broke my water bottle, I need another one exactly like it.” I’m going to get that same water bottle or maybe even an upgraded one.  

I have that water bottle that I use all the time and my friends ask, “Where did you get that water bottle? I tell them I’ll send them the link.  

That’s a loyal customer. I’m not looking around at random websites. I go straight to yours and I send people to buy from you.  

That’s what you want. But you can’t get there by simply satisfying people. You have to go beyond. You want your customers to say “Wow, I can’t believe you did that for me.” Those are the customers that will gladly make introductions for you.  

Not only do you retain and grow a customer you now can ask for referrals.

Loyal Customers Provide Referrals

When I say referral, I mean someone that will introduce you to someone who can buy from you either in another department of their company, a company that’s related to their company, a company they used to work for, or someplace they have colleagues.  

This is where it gets good. Retaining customers help you acquire new ones. You’ll have more conversations and do less cold outreach.  

Imagine this, you can make 100 cold calls, send 1000 cold emails, and have maybe 10 conversations from that effort in a month if you are good. Or you can be introduced to 10 people this month and all 10 agree to a conversation.

How to Get Those Referrals!

Loyal customers are willing to give you referrals. Sometimes they give them to you without even asking. But most of the time you do have to ask.  

You have to ask, you have to earn the right to ask, and then you must be very specific in your ask. 

We all want to not just hit our quota, but exceed our quota, right? Let’s make that easier by getting introductions. 

You need to establish a process that the entire customer-facing team follows.   

Here is my simple four-step process. Feel free to add some things and make this process your own. Just remember that people can follow a well-defined process and the more specific it is, the more likely you are to get the introduction.  

1. Complete the transaction 
2. Thank the customer 
3. Confirm satisfaction 
4. Ask for the introduction 

You can’t do #4 if you haven’t done 1, 2, and 3. Before you ask, ensure that that the customer is satisfied or even better, loyal.  

Your process should make it easy for your loyal customer to give you an introduction and there is a right way and a wrong way to ask for the introduction.

Make It Easy

How do you ensure you get an introduction? Make it easy for someone to give you one.  

What doesn’t work very well is asking, “If you know anyone who could use our products and services, I’d love an introduction.” That doesn’t typically work well because it’s not specific.  

Each person from your team needs to figure out who they have the best relationship with at each customer and then plan an approach to get an introduction to a prospect by naming that company or person specifically.  

The way that I like to do this is to be very specific. 

Note: Tom, I’m so glad everything is going really well with the purchases you’ve made and the installation and training. We love doing business with you and we’d love to have more customers just like you. I’m wondering if Ben in your parts division would need our products? Could you make the introduction?

The wording has to be natural and in a conversation, this is just an example of your side of the conversation.  

Here’s another example.

Note: Tom, there are two other units in your company that I’d love to serve the same way I serve you. I see that Ben Smith runs one and Julie Thompson runs the other. Would you feel comfortable letting them know how I’ve helped you and make an introduction?

Now, if you want to ask for an introduction outside of their company you could use LinkedIn to see who they know. Look up each of your prospects and see if there is a connection. Then ask if they know the person well enough to introduce you. 

So what you’re going to do with the person that you have in mind is you’re going to figure out how you can ask them to introduce you to someone you want to know. You need to name that person specifically or ask them to introduce you to people like themselves who would love the same level of service you provide.

One more way I often ask is by mentioning 3 companies I’m interested in doing business with that I believe my customer may know. I say something like, “I’m very interested in doing business with Company A, Company B, and Company C. Do you know someone at any of those companies well enough to make an introduction?”

Again, only after you have determined they are satisfied and in a conversation. Don’t be awkward. If it is awkward don’t ask. Plan an approach that will feel comfortable to you and the person you are asking for the introduction.  

These conversations lead to referrals. Not everyone you ask will be able to make an introduction every time. Work on asking for referrals into your conversations.  

Once you get an introduction, be sure to communicate with the person who was kind enough to make it. You have to nurture these relationships if you expect to ever get another referral.

Commit to yourself that you’ll create your own referral process and have more conversations. Make a list of people you’ll ask to make introductions because you’ve earned the right. For more specifics on that, read How To Care for Referrals.

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Now that you know how to retain customers and what works well, I want you to practice the art of keeping your customers for life. It’s truly something that every one of you has the power to do. It’s something that we lose sight of because we get so busy. But when we learn to prioritize our customers and really wow them, we can be so much more successful through upselling, increased referrals, and lower churn rates.