15 Practical Ideas to Improve Your Customer Retention Rate

15 Practical Ideas to Improve Your Customer Retention Rate

Customer retention is incredibly important for growing a sustainable business, but before we look at some strategies for improving it, let’s put an important data point front and center:

According to the Harvard Business School, increasing customer retention rates by 5 percent increases profits by 25 percent to 95 percent.

I’ve compiled a list of my 15 favorite tips–many backed by academic research and case studies–on improving customer retention, divided into five sections.

Effective positioning and messaging

1. Stand for something

A quick way to get customers to ignore you is to not stand for anything. Research from the Corporate Executive Board that included 7,000 consumers from across the U.S. found of those consumers who said they had a strong relationship with a brand, 64 percent cited shared values as the primary reason. If you want loyal customers, you need them to care about you. What do you stand for?

2. Utilize positive social proof

While negative social proof (“Nearly 90 percent of websites don’t use heat mapping software!”) has been proven to dissuade customers rather than encourage them, numerous studies on customer motivation have shown that positive social proof (“Join 20,000 of your peers!”) is usually the most effective strategy for getting people to listen and stick around.

3. Invoke the inner ego

Despite what we often say, most people like things that resemble them in some way. This cognitive bias is called implicit egotism, and is an important thing to keep in mind when communicating with customers. In order to attract the sort of customers you want, you need to identify your target customers down to the last detail and then craft a brand message that perfectly matches their pains, goals and aspirations. It’s easier to fill an existing demand than to create one.

Compelling marketing and sales

4. Use the words they love to hear

Not all words are created equal. Certain persuasive words encourage customers to buy more than others, in particular: free, new and instantly. When customers hear these words, and the promises they imply, they’ll enjoy their purchases more than they would have otherwise.

5. Reduce pain points and friction

All businesses, no matter the industry, are going to have to sell to the three types of buyers that are out there. According to neuroeconomics experts, nearly a quarter of these buyers will be conservative spenders, or “tightwad” customers. George Lowenstein of Carnegie Mellon University recommends using bundles, reassuring words (e.g., change “a $5 fee” to “a small $5 fee”) and reframing as strategies to better sell to these conservative buyers.

Generous reciprocity

6. Realize that budget is negligible

Giving back to customers can appear incredibly costly, but it doesn’t have to be. Instead, embrace the art of the frugal wow by understanding that reciprocity is built even with small gestures. In fact, psychologist Norbert Schwarz found that as little as 10 cents can create reciprocity between two individuals (it really is the thought that counts!).

7. Utilize surprise reciprocity

Although reciprocity works incredibly well on its own, research shows that it is even more powerful when started by surprise. For a simple example, recall a time that someone did something nice for you unexpectedly; the gesture probably wasn’t all that unusual, but the fact that it came out of nowhere left a strong impression on you.

8. Make it personal

In a study from the Journal of Applied Social Psychology, researchers found that waiters could increase their tips by 23 percent by the simple act of returning to tables with a second set of mints. So do mints have magic powers? Apparently not: The researchers concluded that the mints created the feeling of a personalized experience among the customers who received them. So it was the personalized service received that made them enjoy their experience so much more.

Effortless customer support

9. Speed is secondary to quality

When it comes to customer service that keeps people coming back, the research shows that quality matters more than speed. According to a study by the Gallup Group, customers were nine times more likely to be engaged with a brand when they evaluated the service as “courteous, willing, and helpful,” versus the “speedy” evaluation, which only made customers six times more likely to be engaged.

10. Customers enjoy businesses who know them

Telling your team to spend more time with customers might seem risky, but smart support managers know that isn’t the case. Everybody views their service experience as more positive when they don’t feel rushed or ignored. Don’t spend time idly, though; have employees attempt to find out key customer traits, just like Derek Sivers did with his employees at CD Baby.

11. Choose the right platform

The best way to improve your online customer service efforts is to utilize the channel your customers most prefer. Although research has shown that a majority of people still prefer and use email more than other services, you need to pick the channel that makes the most sense for your business. Hosting companies know that online chats are critical when their customers’ sites go down, but other businesses may have customers who are just fine using email as their primary method of contact.

12. Make it a communal effort.

Countless case studies have made one thing clear when it comes to creating an efficient support system: You need to keep everybody in the loop. At Help Scout, we use tools like Campfire to access real-time notifications of what’s happening on the customer end; we were able to improve our response time by 340 percent by enabling a support room that all employees can access.

Sticky loyalty programs

13. Get people started

Consumer researchers Joseph Nunes and Xavier Dreze are known for their studies on The Endowed Progress Effect. Their results have conclusively shown that the biggest wall that prevents customer loyalty programs from sticking is getting people started. They’ve shown through their notorious “car wash study” that people are twice as likely to finish loyalty cards if they are automatically started (or rewarded) as soon as they sign up.

14. Get ideal customers to be VIPs

Additional research by Nunes on loyalty programs has shown that people love being VIPs or gold members of programs. There is one caveat, though. This only works when people know there is a class below them on the totem pole. Speaking to human nature, Nunes saw a notable increase in gold members’ participation as soon as he implemented a lesser silver class.

15. Label your customers

Research on voting patterns conducted by Stanford University showed that people are more likely to participate in something if they are labeled with a positive trait. Our friends at Buffer refer to their premium customers as “awesome” members, and even label their upgraded payment plan as the “Awesome Plan”–a much easier phrase to embrace than “paid member.”

There are many tactics, but no shortcuts

You can’t “hack” a personal relationship, so why should we assume business relationships are any different? Truth is, the tactics above should hopefully give you some fresh ideas for approaching retention, but they’re not a cure-all. Customers buy and stay loyal to companies they appreciate, believe in, and get value from. Your product or service will do most of the heavy lifting in keeping customers loyal, and there are no shortcuts for that.

Source: Inc. Magazine 

7 Reasons You Need a Mentor for Entrepreneurial Success

7 Reasons You Need a Mentor for Entrepreneurial Success

Mentors. They’ve been there, done that and have seen it all. Yet, a woeful number of entrepreneurs start their careers without one. In an age where instant gratification is glorified, it’s unsurprising that many entrepreneurs and young founders do not seek out a mentor as hard as they try to find a co-founder.

While arguments abound on why entrepreneurs do not need mentors but should only follow their own instincts and gut feelings, most successful tech titans have founders who had mentors. Facebook’s Mark Zuckerberg was mentored by Steve Jobs. Jobs was mentored by Mike Markkula — an early investor and executive at Apple. And Eric Schmidt mentored Larry Page and Sergey Brin of Google.

Like most startup founders, I didn’t start with a mentor. I got into the industry and had to look up to someone who is well known in the field. This is not as effective as working hard to get a mentor to guide you while you run your business — but it’s better than nothing. Having been in business for more than seven years, I’ve realized the importance of having a business mentor.

Here are seven reasons having a mentor is important.

1. Gain experience not shared in books.

Experience is a very expensive asset — yet it’s crucial to business success. There’s only so much about a person’s experience you can gain from books. It’s an unstated truth that most authors do not feel comfortable revealing everything about themselves in books. Some personal experiences may be too intimate to be shared, yet how they dealt with it can help an inexperienced entrepreneur’s career.

Mentorship is one guaranteed way to gain experience from others.

2. You’re more likely to succeed with a mentor.

Research and surveys prove that having a mentor is important to success. In a 2013 executive coaching survey, 80 percent of CEOs said they received some form of mentorship. In another research by Sage, 93 percent of startups admit that mentorship is instrumental to success.

Your chances of success in life and in business can be amplified by having the right mentor. The valuable connections, timely advice, occasional checks — together with the spiritual and moral guidance you will gain from having a mentor — will literarily leapfrog you to success.

3. Network opportunities.

Aside the fact that investors trust startups who are recommended by their friends, a successful mentor has an unlimited network of people who can benefit your career. Since they are already invested in your success, it only makes sense for them to let you tap into their network of people when the need arises.

This is an opportunity you cannot tap into if you do not have a mentor.

4. A mentor gives you reassurance.

It has been proven by research that a quality mentorship has a powerful positive effect on young entrepreneurs. Having someone who practically guides you and shares your worries with you — often placating your fears with their years of experience — keeps you reassured that you’ll be successful.

Self-confidence is very important to success as entrepreneurs. A 2014 Telegraph report revealed that having a high self-confidence contributes significantly to career success — more so than talent and competence. Mentors have the capacity to help young founders tap into their self-confidence and see every challenge as an opportunity.

5. A mentor will help you stay in business longer.

When you imagine the number of businesses that fail, you’d wish a lot of business owners had mentors. According to SBA, 30 percent of new businesses may not survive past the first 24 months, and 50 percent of those may not make it past five years. However, 70 percent of mentored businesses survive longer than 5 years.

6. A mentor will help you develop stronger EQ.

Does maturity bring about a higher EQ in entrepreneurs? Emotional intelligence is crucial to entrepreneurial success. When a young entrepreneur has a more mature and successful mentor who advises them, they are likely to have greater control over their emotions.

We all know that a quick way to make a business fail is to mix it with emotions or make crucial decisions based on emotional feelings. Situations like this can be curbed as mentors will help show you how to react in given instances.

A story on Business Insider reveals how Schmidt worked with then inexperienced Page to manage the affairs of running a fledgling startup. An inexperienced CEO often makes decisions based on emotions, but one with a mentor like Schmidt is able to overcome critical hurdles by making smart decisive judgments.

7. Encouragement.

Enduring the consequences of failure on your own can set you back and impact your productivity. In hard times, having a mentor will help you keep your head high. Young entrepreneurs often deal with depression when they are unable to meet their goals and expectations. The impact of depression on entrepreneurs is often underreported. But entrepreneurs without mentors bear the brunt the most.

A mentor who has experienced the highs and lows of running a business is in the perfect position to give positive and soothing words of advice to you when things refuse to go your way. And not only do they have the right words to share, they would also have ideas to help you navigate your way to success.

Source: Entrepreneur Magazine

How to Get a ‘Yes’ to Your Next Sales Pitch

How to Get a ‘Yes’ to Your Next Sales Pitch

To gain that first appointment with a client, you must jump many hurdles—some of them higher than ever before.

The first is the busy-ness of your contacts. They won’t meet with anyone who can’t help them produce better results now. To your contacts, all salespeople sound the same, making it next to impossible for them to determine who is worth seeing. So they refuse meetings with everyone, betting that none are worth a spot on their already-overflowing calendars.

Adding to their stress: Even relatively low-level employees often are measured on financial performance. Your contacts feel pressured to work with people who can help them improve their financial metrics. They won’t give up even a half-hour on their schedules for a meeting with a salesperson who says, “I’d like to stop in and introduce myself and my services.” Potential clients see that as frittering away time better spent on making or saving money.

They’ve also heard, “I’d like to spend time learning about your business.” To your target contact, this statement implies that you don’t know enough to be helpful. This overture also sounds like wasted time and will earn an automatic “no, thank you.”

To merit a spot on your prospects’ calendars, you need a pitch that holds the promise of monetary returns for them.

Do your homework.

If you are going to book first visits, you need to sound like someone who has the business acumen, experience and ideas that can make a difference in your prospective client’s business—in other words, a compelling value proposition for your sales call.

This means doing your due diligence before you make that phone call or write that email. You need to know what the three or four major issues your prospective customer is likely to be dealing with—or will be soon.

Instead of introducing yourself and your services, your prospecting pitch needs to be built on your ideas about the root causes of your prospects’ challenges and how they can think about them, hopefully leading them toward a groundbreaking solution. It sounds like this: “Hi, Mary, this is Anthony with XYZ Inc. My company helps people deal with the challenges of low productivity, high consumable costs and employee dissatisfaction. I am calling to ask you for 20 minutes to share the three biggest trends impacting your business and give you some ideas that help our clients produce better results at lower costs. Could we meet for 20 minutes on Thursday? I’ll share these ideas with you, and even if you never buy from me, they will help you and your team.”

This pitch doesn’t suggest that I will talk about my company or myself. It doesn’t indicate that I am going to try to make a personal connection; instead it says I am going to help the prospect think about her business and its problems. You have to focus on helping your prospects with their biggest challenges, those same challenges you discovered when doing your research.

Pitch to the correct contact.

For decades salespeople were told to start as high up in the organization as possible and then let the C-level executive introduce them to his or her team. This used to be wise advice, but now folks in the C suites want consensus about solutions before they weigh in, and if the salesperson hasn’t been vetted by their teams, the executives aren’t likely to push their solution onto lower-level workers.

Today there’s a new contact to target with your prospecting: the CEO of the Problem. The CEO of the Problem is the person who must achieve results in dealing with the issues that you can resolve. The contacts who fit this role will also be the people who are the most susceptible to your message because they’re the ones struggling to produce results. You can help them, and they will meet with you, provided you’ve convincingly conveyed your ability to help when you reach out with your prospecting call, voice mail or email.

(Note that the CEO of the Problem may have a C-level title. But the larger your prospective client company, the less likely that your vital contacts rank this highly.)

Nurture your prospects.

The Internet gives customers access to vast information that salespeople were once relied upon to deliver, which is another reason you’re unlikely to land a meeting if you offer only to introduce yourself and your company. But the upside for you is that the Internet also provides salespeople with easy access to crucial contacts as well as the means with which to communicate with them.

It takes time to gain an appointment with your prospective clients. It isn’t easy to earn respect for the value you create. To do that, your prospecting effort needs to include newer modes of communication, such as LinkedIn, Facebook and other social media, to connect directly with your prospective clients.

These new tools allow you to demonstrate that you can create value by proving that your ideas can make a difference for your prospects. Build a campaign in which you reach out 12 times, “touches” that you can use to stay connected with your prospective clients by providing valuable insights and ideas. Send them white papers and links to TED Talks or keynote speeches by industry experts; mail them a trade magazine article or a link to an article containing industry news. Map out a strategy in which, for instance, you connect on LinkedIn, send an email with a link to content your prospect will find valuable, and follow that up with a phone call.

Such a campaign will massively increase the odds that you receive a yes to your request for a meeting. Who wouldn’t want to meet with someone who can help improve his or her business?

Source: Success Magazine

39 Behaviors of the Most Likable People

39 Behaviors of the Most Likable People

There are a lucky few born with natural charisma – masters of working a room in seconds with handshakes and laughs. Candidly, I was not the most likable person in the room during my late teens and early twenties.

I admired the way likable people made me feel and how others people gravitated toward them. It hit me that our greatest gift is the way we make people feel. I wanted to learn the secrets of their success.

Starting in 2011, I started learning how to be more likable. The most effective thing I did was notice the behaviors and traits of the most likable people – and then adopt them as mine own.

Here’s a list of 39 things that the most likable people do on a daily basis – so you can do the same.

  1. They actively listen.
  2. They make a great first impression.
  3. They’re accountable for their mistakes.
  4. They do what they say they’ll do.
  5. They treat everyone with respect.
  6. They ask questions instead of making assumptions.
  7. They laugh.
  8. They live for themselves, not to please others.
  9. They follow-up.
  10. They smile.
  11. They remember your name.
  12. They offer to help.
  13. They aren’t afraid to make mistakes.
  14. They send thank you notes.
  15. They encourage others.
  16. They speak slowly and confidently
  17. They don’t judge you.
  18. They apologize.
  19. They forgive, but do not forget.
  20. They don’t speak for you.
  21. They know how to give a compliment.
  22. They know how to accept a compliment.
  23. They tell the truth.
  24. They celebrate others.
  25. They have good body language.
  26. They don’t criticize others.
  27. They give you their undivided attention.
  28. They don’t make you feel defensive.
  29. They don’t take credit for other people’s success.
  30. They maintain good eye contact.
  31. They let you do most of the talking.
  32. They know how to have a tough conversation.
  33. They admit when they’re wrong.
  34. They are consistent.
  35. They don’t interrupt.
  36. They’re not afraid to be vulnerable.
  37. They don’t exaggerate.
  38. They can laugh at themselves.
  39. They’re optimistic, without being unrealistic.

This is a way of life

Take notice that these behaviors are all about being a good person and making others feel good. They aren’t tactics and tricks. They’re a way of life. You will see dramatic change when you make the necessary effort to practice these behaviors and truly adopt them into your daily life.

Putting this into action

Meaningful change is achieved when you consistently make small improvements over time. My results came from focusing on one or two of these behaviors at a time, and practicing them in my interactions until they became a habit. Only then would I move to the next one.

Learning to be likable takes time, self awareness, and practice to authentically mold these behaviors into a natural routine. There are no shortcuts.

Source: Inc. Magazine

Tim Ferriss, Sheryl Sandberg, Lewis Howes, and More Share Their Best Business Advice

Tim Ferriss, Sheryl Sandberg, Lewis Howes, and More Share Their Best Business Advice.

 

 

1.Tim Ferriss: Choose your friends wisely.

“The best advice I’ve ever received is ‘you are the average of the 5 people you associate with most.’ I’ve actually heard this from more than one person, including bestselling authors, Drew Houston of Dropbox, and many others who are icons of Silicon Valley. It’s something I re-read every morning. It’s also said that ‘your network is your net worth.’  These two work well together.”

2. Sheryl Sandberg: Seize incredible opportunities that come your way.

“The best advice I ever received was from Eric Schmidt, when he was Google’s CEO & I was thinking about not taking the offer from Google. He told me that when picking a job, only one criterion mattered: fast growth. He said, ‘If you’re offered a seat on a rocket ship, you don’t ask what seat. You just get on.”

3. Lewis Howes: Invest in yourself.

“Grant Cardone told me to invest more of the money I make back into my brand and in myself. Always invest in you!”

4. Guy Kawasaki: Listen to your customers (while you still have the chance).

“I’ve had lots of good advice but this one is one of the best. ‘As long as people are complaining, they still want to do business with you. When they stop complaining is when you need to worry.’ It was from Marty Gruber, president of a jewelry manufacturer that I was working for in Los Angeles, way before my tech career.”

5. Vanessa Van Edwards: Seek learning opportunities in everything.

“Every time you think to yourself, ‘I already know this’ or ‘This isn’t for me,’ try turning it around by asking, ‘How can I make this work for me?’ This instantly puts you into a learning mindset and helps you see opportunities everywhere. I learned this from Marie Forleo and it has fundamentally changed how I approach my business life.”

6. Nir Eyal: Build a meaningful network.

“The most insightful advice I can remember receiving came from Andy Rachleff, who at the time was teaching at Stanford. He helped me understand the tremendous power of the network effect.”

7. Tara Gentile: Know your customers inside-out.

“I’ve learned to really think about who I actually want to sell to, instead of some generalization or profile of who might buy from me. Every time I’ve named individual people and created content with them in mind, those people have actually worked with me. No solicitation, just genuine connection by tailor-making what works best for them. Of course, I’ve also met many other amazing people who needed the same things.”

8. Michael Port: Never stop chasing your dreams.

“I asked a friend, who made more than 30 million dollars by the time he was 30, why he thought he was successful. His response: “there’s all this money our there, someone’s going to pick it up, it might as well be me.”

9. Chase Jarvis: Fail often.

The best business advice I’ve ever received was from the legendary Sir Richard Branson (an investor in CreativeLive and mentor/inspiration to me). His simple but brilliant advice is to always manage the downside. “When you prepare against catastrophic downsides (avoid “betting it all” or “mortgaging everything”) it allows you to create a culture where you can take lots of small to mid-size risks, learn and build.” Put simply – it’s exceedingly rare that greatness comes from a single blind all-in swing or a brash act. Boldness is required but the boldness that sticks around to experiment regularly, to fail small and often, and cultivate a culture of risk taking is what generates the most big wins in the end.

10. Derek Halpern: Do great work and promote the hell out of it.

“The best business advice I ever received came from a simple quote from John D. Rockefeller. He said, ‘next to doing the right thing, the most important thing is to let people know you are doing the right thing.’ Right now, we live in an overcrowded world, and if you’re not out there promoting yourself, you’ll NEVER make an impact. That’s why this quote is so important. Do good work and promote the heck out of it.”

Source: Creative Live Blog