Customer Retention Strategy –
How do you most effectively reduce customer churn at the point of contract renewal? Do you have a customer retention strategy? Is there anything that you can legitimately do?
We think so because we believe in the power and influence that great members of staff can have on customers in any business. If I think about renewal type situations that I have experienced this year I can think of shocking examples, name no names a certain Building Society in the North of England and genuinely excellent ones like AXA motor insurance, clearly employing an effective customer retention strategy.
The difference between the two, which were both regulated markets and both largely systems driven/semi-automated was the quality of the personnel involved. Had the interaction with the building society been between a highly capable and knowledgeable employee and myself I may well have remained a customer of the society. Instead, it was obvious that the employee had low levels of knowledge and skill and thus capability and so instead of making a fuss, I simply and quietly took my business elsewhere.
AXA on the other hand was an interaction with a genuinely competent and caring employee who despite the fact that I was calling to inform them that I no longer needed insurance on that car as I had sold it, couldn’t have been more helpful. As a result when my new car arrives the first people I am going to call is AXA. Cost clearly is important, but I have reconciled myself to the fact that provided AXA are ‘in the ballpark’ then I am going to placing my business with them. An excellent customer retentin strategy in place?
The decision to renew or not in both instances was based ENTIRELY on the quality of the employees I dealt with. Had the knowledgeable AXA employee been working for the building society I would still be a customer. Whilst I am sure I am not their most valuable customer I cannot see how they can continue to lose business like mine simply because of the lack of knowledge and low competence of their employees. Word travels fast these days and like the old adage says I have told many, many more people about the poor quality interaction and named the society than I have the excellent quality interaction.
So when faced with looking for ways to add value to your organisation look carefully at the knowledge and capability of the employees you employ in this area of your business (in fact in every area of your business just in case your valuable customer ends up speaking to somebody not in the renewals team!).
Before you convince yourself that your employees are already knowledge and capability experts, consider the fact that we conducted more than 20 million individual knowledge interventions in 2016 and so far the average level of knowledge/capability is just 54% of what the employer would desire. Put another way, every other question posed to the employee was answered, incorrectly!
Just imagine, for one moment, that your employees in your renewal team were scoring similar levels of competency. What would be the impact on your business? I can answer that question for you because your employees are on average scoring at that level. If you don’t believe me we would be more than willing to take the challenge and prove the point – I am perfectly happy to bet our fee on the outcome.
Imagine if you will what the impact on your renewal success would be if all of your renewals team were scoring 94% rather than 54%?