Customer retention is on the minds of small and medium businesses across industries. Studies have shown that acquiring new business can cost anywhere from five to twenty-five times more than retaining existing customers but for service industries like salons, banks, insurance agencies and health care providers, client retention can be as low as 30 percent. Meaning 7 out of every 10 customers those businesses bring in will NOT return.
So that begs the question, if keeping customers around is so valuable, why are retention rates so low in service industries? – Maybe you’re missing the message, the text message, that is.
Customer relationship management
A lot goes into keeping your customers coming back. Many business owners believe that they’re providing exceptional customer service but is that all it takes? Service is only at the surface of retention. Customer relationship maintenance or continued selling and service, may feel like heavy lifting compared to acquisition but costs are generally lower on a period by period basis. Over time, those one-to-one “relationships” grow into customer trust and loyalty. Additionally, customers who are satisfied in their relationship with a business are more willing to pay for services at a higher price point.
Customers are increasingly less available by traditional communication methods like phone calls and emails. This can make it difficult to foster those valuable relationships but there is another route many businesses are not even considering. Texting is the preferred method of communication for most of the US consumer base. We text with our friends and family-why not with businesses?
By texting with your customers, you are differentiating your business and showing your customers that you value not only their time but also your relationship with them. Texting heightens the level of convenience and saves both you and your customers’ valuable time. Texting allows for quicker, more precise conversations and lessens the likelihood of misunderstandings.
Automation vs. conversation
Many businesses think that they are already texting with their customers through automated CRMs but there’s a human element to texting that should not be overlooked. Consumers aren’t interested in texting with robots. If you take away the personal element, there really is no relationship to build that coveted trust and loyalty on, that eventually leads to customer retention.
While automated texting solutions have their place it’s important to acknowledge that most only offer one-way or very limited communication options and responses can be limited to one-word. CRM systems usually utilize randomly assigned short codes or 10-digit numbers not associated with your published business phone number. This can be confusing and frustrating to your customers. It’s not entirely necessary to eliminate these automated systems but you may consider using them in conjunction with a two-way texting platform that does use the business phone number your customers already know.
With Zipwhip businesses have an opportunity to take text messaging to the next level decreasing the transactional aspect of your business and increasing the personalized service. Think about switching your focus from a single, point of sale, to connecting with customers on a personal level and allowing them to engage with your business in a real and personal way.