You know the correlation between client loyalty and profitability. You also know how costly it is to replace customers who leave.
So how can you identify those who are likely to place their business elsewhere?
Why not try our three simple steps below:
- Understand what's important to them
The above diagram gives you a good example of what could be most important to your clients*. Note that 'price' and 'cost' hardly feature. Clients will sometimes use price as a justification for leaving but there's almost always another, bigger reason. Price is simply used to avoid confrontation. Most research points to the business's perceived indifference to the client as the primary cause.
- Now call them
In order to understand which of your customers hasn't received the service that they're after or feels little or no loyalty to you, you need to talk to them. Depending on the individual, a telephone call** is often the best way to do this.
Introduce the call by saying that you're carrying out a quick customer satisfaction survey. People are usually keen to give you their opinions on how things could be improved. Emailing or posting a printed survey could also be used, although you're likely to get a much lower response rate.
If the conversation goes well you might also ask them for a testimonial and/or introduce them to your referral programme.
Any costs you incur in the process will be returned many times over by stopping just one or two from defecting to a competitor.
- Set up a simple customer loyalty programme
As previously mentioned, perceived indifference is the reason why most customers take their business elsewhere, so consider how best to keep in touch with your clients between annual renewal communications. Here are some ideas:
- Arrange a policy annual review a couple of months to go before renewal.
- Send them regular valuable emails** (similar to what I send you here) directing them to relevant content on your website.
- Send them a handwritten or a personalised thank you card when they give you a referral.
*Image taken from referenced material in MarketingMentor.net
**You should not send marketing communications to any customers who have let you know they do not wish to receive them. You can find full guidance about when to send here.