Like a bird in the hand, a happy existing client is worth two in the bush. In fact, a mere 5% rise in customer retention increases profits by at least 25%. Some of that comes from additional purchases repeat customers make over time, but the remainder comes from referrals satisfied clients generate.
Readers will consider what strangers post on social media sites about restaurants, businesses — and even alarm companies. But when happy customers are neighbors or business contacts, their recommendations carry even greater weight.
A strong retention and referral program can make a huge difference in the bottom line at your alarm company. The following four tips can help you retain existing customers while expanding your business.
1. Gather customer intelligence.
Customer acquisition cost is a data point you can use to quantify the business your marketing efforts generate. In the old days, you asked new customers where they heard of your alarm company; now, with web-based advertising and targeted email campaigns, you can constantly monitor traffic leading to sales.
But leaders of firms need to know how much attracting each customer costs. The average cost metric is precise since it incorporates your complete expenditure in direct and indirect costs. You should periodically recalculate your customer acquisition costs to ensure your marketing is helping you reap the results you desire.
Additionally, you can track customer acquisition costs to shape your retention and referral program. After all, it costs more to acquire new business than to keep existing customers.
2. Under-promise and overdeliver.
Put your customers and customer service first! Start with on-time, seamless installations. Managing customer expectations can help you retain business and boost the likelihood happy customers will cultivate your reputation.
3. Know your losses and break-even points.
Successful business owners regularly evaluate their company's financial performance. If you lose money or business, determine the reason. In your assessment, you should look at more than sales and expenditures. Analyze your financial ratios to review price points, customer intake, client retention, and expenditures.
Knowing those ratios enables you to make educated marketing decisions affecting customer retention. For example, you may want to take a short-term loss on new customers or offer a discount for successful referrals to benefit your company in the long run.
4. Develop a solid referral program.
So, creating a program that utilizes customer referrals, including direct referrals to acquaintances and community referrals via social media, makes sense — and cents.
Incentives can be very effective tools in getting your referral program off the ground. Resources like discounts, rebates, and gratitude can bolster your efforts, so periodically educate customers about your referral program.
One element is at the core of all successful customer retention and referral marketing efforts: providing exceptional service at fair prices. Ensuring your alarm company employees practice that is of paramount importance.
Then, recognize the value to your bottom line that customer retention offers. Besides striving to attract new customers, encourage your existing clients to help grow your business. Build a solid referral program to ensure your profits can grow in the long term.