Building ‘a culture of customer retention’ is key to long-term growth

bucket2There’s an old story about the sales guy that dies and is given the choice of spending a day in Heaven and a day in Hell before deciding where he wants to spend the rest of eternity. So, first he takes the elevator down to Hell and to his amazement the doors open to the most beautiful country club he has ever seen. All of his past friends and family members are there to greet him, clapping as he walks to the first tee. After his best round of golf ever, he joins them for a sumptuous banquet celebrating his life. The next day he takes the elevator to Heaven and spends a day of quiet reflection serenaded by angels amidst blue skies and soft white clouds. As you might suspect, despite how nice Heaven was, he decides to spend the rest of eternity in Hell. But this time when
the elevator doors open there is no country club and beautiful scenery, no friends and family, just an ugly, gray, barren wasteland littered with the rotting carcasses of dead animals and smoldering car wrecks. When he complains that this wasn’t what he had experienced the day before, he is told simply, “Yesterday you were a prospect, but today you are a customer!”

Well, for everyone who has ever been enticed by attractive introductory offers only to be met by mediocre service, broken promises and increased fees once they are locked in, this is no joke. Truth is, most companies are more focused on winning customers than investing in keeping them, which is a huge and very costly mistake.

We’ve just completed a project for a company that was successful despite losing fifty percent of its new customers at the end of their first contract year. This kind of customer churn put tremendous pressure on the organization, was extremely demoralizing, and very expensive. It was clear that to ensure their future they needed to completely refocus their organizational culture around building long-term customer relationships starting at acquisition. We call it building ‘a culture of retention.’

Every organization needs to recognize that the most important customers are the ones they already have and that increasing their lifetime value is essential to growing sustainable profitable growth. By focusing on exceeding customers’ expectations, they can start plugging ‘the leaky bucket’ and minimize customer churn.

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