Profit Leak 7 – Are Your Customer Attrition Rates Too High?
Are you spending enough time learning how to retain your existing customers? Do you know what a good attrition rate for your company is? Many times business leaders simply accept their attrition rate as normal. While it is unreasonable to expect to keep every customer, most business owners do not do enough to understand their attrition rate and to make necessary changes in their business strategy to reduce it. This can be a huge leak in your business model.
Steps to Keeping Your Customers
Do you find it easier to keep and sell more business to existing customers or to get new ones? If your answer was that it’s easier to get new customers, you may have problems on three fronts:
- Scalability – The lower your client retention, the less scalable your business.
- Value, Quality or Service Issues – Lower retention may be an indicator that you are not adding enough value in the right areas or you have service problems.
- Reputation – When you lose customers because of value, quality or service, it will become harder and harder for your business to grow. As customers leave, they are likely to tell others why and that will hurt your company’s reputation.
From a growth perspective retention is your foundation. The more customers you can keep, the fewer new customers you will need to achieve your growth goals. The longer customers are with you, the more likely they are to say great things about you. The better your reputation and the more “old” customers you have, the easier it is to get more customers.
If you are interested in addressing your “profit leaks,” let’s schedule a time to further discuss your business and how we might work together to patch up your leaky bucket. Call us for a FREE consultation (305) 722-7213.