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Mind Capture

By Tony Rubleski
President & Author,
Mind Capture Group
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Most businesses treat customer retention like a giant elephant in the room that should be avoided and rarely if ever talked about. With the continual cost of new customer acquisition continuing to rise, it’s baffling as to how few sales people, businesses and non-profits make customer retention a major priority within their marketing plan.

For example, a few weeks ago I sat in on a speech that a friend and fellow speaker gave in Detroit. When he was finished, I stayed around a few minutes to hear a few remarks by one of the key company executives. As he clicked to his third PowerPoint slide, he mentioned the number of new accounts opened in the prior 12 months along with the number of closed accounts during the same time frame. The number of closed accounts was equivalent to 75 percent of the number of new accounts that were opened! I couldn’t believe at first what he stated and the numbers he flashed up on the screen. I sat in the back of the room shaking my head in disbelief.

To say that I was shocked is a massive understatement. Granted, the industry represented at the event is extremely competitive, but there’s simply no excuse for such atrocious retention numbers. I thought in my mind two quick questions: Why in the world are they acting like this is no big deal and what in the world are they going to do to dramatically increase customer retention? If I were the CEO of this organization, I would be up every night with “marketing insomnia” figuring out possible solutions to fix this glaring challenge within the company.

While this true story may cause a chuckle, and make you feel better about your own business, let me caution you again to not take your customers for granted these days. The customer of today is under continual assault from hungry and often desperate competitors that work non-stop on coming up with ways to pick off the business you’ve earned recently and over the years.

“But Tony my business is different.” I’ve heard that statement so many times from overly confident business people that I want to laugh out loud because I know it’s untrue. Ninety-five percent of business boils down to three key ingredients: trust, communication and relationships. It’s not magic, but common sense, which seems to be in shorter and shorter supply these days within most organizations.

I’d like to identify and share with you my top five reasons to avoid losing customers. You may want to share these with everyone inside your organization to remind them that not only do customers sign their paychecks; but that they also impact the company in more ways than most people rarely stop to identify and think about.

1. A lost customer takes their goodwill and referrals with them. We spend a lot of time within these pages and in our monthly audio interviews discussing the power of referrals. Word-of-mouth marketing is still the most potent form of marketing in both the online and offline realms of commerce.
2. A lost customer means lost revenue. I’ve learned this myself the hard way in my business career. When you lose a big client, for example, at renewal time you have to budget opportunity costs to not only find a new customer to make up for lost revenue, but you also use up valuable mental energy in the process. Lost revenue impacts everything and everyone within an organization.
3. A lost customer can hurt plans for future growth. When a company experiences a down year or less than anticipated growth, the number one thing many of them do (in my opinion one of the dumbest things) is to significantly cut back on their marketing efforts. A retreat and “play-it-safe” plan is put into place which not only limits their ability to move on new opportunities, but also allows a competitor(s) to move in and pick up even more new business.
4. A lost customer hurts morale. When a key account switches or leaves a company it impacts so much more than most people realize including: commissions, bonuses and often employee benefits. Yes, when the bottom-line is impacted by a drop in revenue something has got to give. Firms are running much leaner these days in the changed economy and every item on the balance sheet is being given extra scrutiny.
   
   It is everyone’s interest that the ownership team to not only share good news on a regular basis with the entire team, but also the key areas that need improvement and the how and why of their impacts in other facets of the business. Motivation is built on clear, open and honest communication. Keeping employees in the dark or waiting too long to update them on key changes in relation to customers is not a wise strategy.
5. A lost customer means less time to focus on bigger and better initiatives. When you’re distracted, you simply can’t perform at an ideal or optimal level. If staff is getting bogged down in the “putting out fires” mode on a regular basis it saps and diverts much needed energy and resources away from the highest and best use of their time and talents. Reselling accounts is a when a crisis appears is a reactionary versus proactive strategy and is still used by a huge number of organizations driven by obsessive quarterly sales goals that usually focus solely on new customer acquisition. Customer retention is treated as a nuisance or afterthought in the overall picture especially when employee or company morale is low.

Bestselling author Tony Rubleski, is the president of Mind Capture Group based in Spring Lake. His third book titled, MIND CAPTURE: How to Awaken Your Entrepreneurial Genius in a Time of Great Economic Change was released via Amazon.com in January 2011. For feedback and/or column ideas he can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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