/ It’s time to beef up your customer retention efforts: how to make more money without more sales

Businesses know how to increase revenue through customer acquisition—and they are very good at it. But according to a recent Forbes article, there is far more profitability in retaining existing customers.

Here are some stats I found compelling:

  • Gartner reports that 80% of future revenue comes from 20% of current customers.
  • Bain reports that a 5% increase in customer retention can increase business profitability up to 95%.
  • Bain found that second-time customers refer an average of three people to businesses.
  • Customers of two years double their original expenditure, according to the Harvard Business Review.
  • 70% of repeating customers are willing to consider future products that the business produces.

Given those stats, consider the composition of your sales team compared to your customer services team. Most likely, the teams are far from equal. Sales may appear like the favored, older child with significant funding and training, and customer services the oft-neglected younger sibling who only gets socks for Christmas. You have the opportunity to change that. Here are three practical ways you can churn more revenue with customer retention:

  1. Break down the numbers and prioritize.

Dividing budget is tricky, particularly when you’re used to investing everything into the customer purchase path. You can use data to prioritize funds and determine exactly how much to invest in retention. Remember, a 5% increase can increase profitability by as much as 95%.

  1. Up-sell and cross-sell.

Current customers already know your business and, hopefully, love your product or service. You can tackle your largest enterprise customers and woo their other departments/subsidiaries. Cross-selling complementary products or services is also a powerful way to increase revenue without a long closing cycle.

  1. Leverage customer testimonials.

Customer testimonials are word-of-mouth marketing, and your customers’ peers want to know what the market is saying about you. Take control of the conversation by offering existing customers a discount in exchange for a testimonial. When you get quotes from key executives and make a promo video, you can take that credibility all the way to the bank.

As an added bonus, the testimonial process helps you get voice-of-customer (VoC) data on how people are actually putting your product to use, and what they would like to see that your focus groups might have missed.

Is data holding you back?

Everyone knows that it’s more cost efficient to retain customers than to attract new customers, but the process often requires some organizational changes. Those changes are hard to justify when you can’t see immediate impact of your customer retention efforts. The data detailing the impact is spread out across multiple departments, and you have to rely on reports that are difficult to obtain.

Domo gives you a way to see all the data you care about, in one place, in real time. Get a demo to see how Domo can help you kick your customer retention efforts into overdrive and make the right organizational changes, faster.

Tags: sales

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