How To Prevent Customer Turnover

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Ali Cudby is the founder of Your Iconic Brand. Ali Cudby is the founder of Your Iconic Brand.

The other day, I was talking to a business owner who shared a problem they were having in the business. He said the company was spending a lot of time, money and resources on customer acquisition, and the conversion process was going well. The problem started after customers came on board.

Customers seemed to like the company’s products, but customer turnover numbers were higher than expected. After all the effort to win customers, they weren’t staying, and this business owner couldn’t figure out why. He wanted buyers to become long-term customers.

Trying to help diagnose the problem, I asked who was responsible for customer retention in his company. He looked startled by the question and replied, "Customer retention is everybody’s job!”

The idea that “everybody” is responsible for customer retention is a common belief, yet it’s fundamentally flawed. Worse, it can actually contribute to customer turnover.

Customer retention is one of the best drivers of revenue and profitability in a company. Keeping your customers is an effective path to long-term growth – perhaps your most effective path. Research shows that when companies reduce customer turnover by a scant 5% they add 25-95% more profit.

For that reason alone it’s worth taking the time to understand customer retention and prevent turnover.

To dig into the reason why having “everybody” in charge of customer retention is problematic, let’s revisit the old story about somebody, everybody, anybody and nobody. It goes like this:

"There was a job to do. And Anybody could have done it. But Everybody thought that Somebody would do it. So Nobody did it."

In other words, "Nobody" was running the show.

If everybody in your company is tasked with a job, nobody is ultimately responsible for it. Sure, the customer experience is driven by a coordinated effort:

  • Sales teams interact with customers before they come on board and sometimes after they buy.
     
  • Product teams listen to customer feedback and make appropriate adjustments to a company’s offerings.
     
  • Marketing develops customer-facing messages that are seen throughout a customer’s experience with you.
     
  • Customer support teams ensure the best use of products and services, from technical support, customer success integration for complex purchases, or simple customer service needs.
     
  • Even your company’s leaders contribute to the customer experience by setting the overall tone for engagement.

Reading that list may make you think, “But, Ali, that sounds like everybody, and you just said ‘everybody’ can’t be responsible for customer retention.” You’d be right – except in the most important way.

Team members from all these groups contribute to the customer’s experience. But unless someone is overseeing customer experience as a whole, you’re still left with “nobody” in charge.

Putting one person in charge of your company’s customer retention effort is how you improve and gain the lucrative, long-term customers your company needs. The buck has to stop somewhere.

In the case of the business owner I was talking to, the company didn’t have a person who was ultimately in charge of the customer experience. Everybody in the company was doing what they thought was best for customers, but nobody was tasked with being responsible for it. Here’s what happened:

  • The sales team heard feedback about the customer’s experience with the product. Without a single person to go to, it was unclear how to share the feedback constructively. The feedback got lost.
     
  • The product team wanted to make sure customers understood the benefits of the improvements they created but weren’t successful lobbying the marketing department. The improvements were launched without fanfare or explanation and went underutilized.
     
  • The marketing team created amazing collateral pieces that looked fantastic, but the clever language didn’t coordinate with the issues real customers were trying to solve, which negatively impacted customers’ connection to the company.

Customers didn’t feel seen, heard, and valued. And they left.

As I shared with that business owner, you don’t need to have a Chief Customer Officer. You probably don’t even need to hire someone new. Empower one person with the responsibility for customer experience and begin to create consistent processes that build trust with your customers.

When customers trust you, they are less likely to leave. Retention goes up, and your company converts purchases into profitable, long-term customer relationships.

No matter what your company does to make money, having a single person at the helm of your system for customer retention will improve the odds of success. To begin, ask yourself a simple question: "Who's in charge of customer retention?"

Ali Cudby is the founder and chief executive officer of Your Iconic Brand.

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