Improving your customer retention by 5% could increase your profits from 25% to 95%, and it costs five times less than acquisition.
I am doubtless; focusing only on acquiring new customers is a business mistake. Unfortunately, many rookie entrepreneurs do not focus on improving their Customer Lifetime Value.
New lead conversion is critical for a profitable business. I know that it is pretty exciting to close that well-earned sale finally. But getting existing customers to buy multiple times will take your profitability to the next level.
We need to keep them happy!
“The customer is always right,” then?
CLV is tightly related to customer satisfaction. Therefore, apart from delivering excellent products or services, you must ensure excellent customer service and communications to improve your CLV.
That is why we have heard it so many times, “the customer is always right.”
Even though that saying can make us cringe, the truth is that your customer is the ultimate judge of their experience with your business. And they know it — just like you know, customers also get confused, exaggerate, or even lie.
But, hey… who is perfect, right?
Improving Your Customer Lifetime Value
Your business communication should not concern whether you or your customer is correct. Instead, we should always try to find a common ground of understanding where:
- They are happy with the service and your disposition to solve their problems.
- You do not give in, trying to fit any unrealistic expectations they throw at you.
That is why improving your CLV through customer service has two precise requirements. First, you must get to the bottom of the issue with as little friction as possible.
Second, you cannot be awkward or defensive when communicating with the client.
Excellent Customer Service Default for Repeat Customers
Let us get into the first part. How do we get to the bottom of the issue?
- Acknowledge the customer’s inconvenience. Always. For example, instead of answering, “That’s not it!” when you disagree, say something like: “We understand XYZ is troubling you.”
- Get to the root of the issue so that we can find a helpful solution. Do not assume you are right or that you know what is going on before exploring the case in depth.
- Validate the customer’s inconvenience. Agree with them on the importance of the matter or, at least, with the consequences that matter causes them.
Then, establish your position when the customer has unrealistic expectations (or has touched your sensible fibers!):
- Accept the mistake and apologize if the issue is on you.
- Explain the error and kindly educate the customer if the blame was on them.
- Acknowledge the misunderstanding and be optimistic about the client’s upcoming experience without blaming them.
Dealing with your client’s feedback can be stressful; it is understandable if you do not get it right 100% of the time. Who could?
But it is essential to improve your customer service default responses to the ones that help you find that common ground I told you about before.
Or would you keep doing business with someone who wants to defend their point rather than solve your problems?
I hope this customer service strategy can help you get your existing clients to keep buying from you for a better CLV, even if the way is not a bed of roses!