In Times of Crisis Worry about Retaining Your Clients

Published
07/03/2012

Taking about the crisis is like closing the stable door after the horse has bolted. But it is always important to remember that the crisis is still there and, therefore, the question is: what have companies actually done up until now?

Obviously, the current economic situation has brought about important changes in consumer and client behaviour, which in turn has led to a slump in sales for many companies. And for another large number of companies, sales are now more difficult, slower and sluggish than before. In other words, the market has spontaneously stopped generating consumers and clientes, practically without any effort by companies, as in the previous decade thanks to the accelerated growth experienced by the Spanish economy.

But in this context, the great majority of companies have not – as it would have been logical and rational to do – completely overhauled their client relationship models (and when they have, they have only introduced cuts). If the characteristics and conditions of the marketplace change, companies cannot simply carry on as before, or, worse still, do less than they did before! Many entrepreneurs and executives have ignored a fact that, on being self-evident, we often forget: if your aim is to save your company from the effects of the crisis, first you have to do something about retaining your clients.

In other words, if your company is incapable of retaining its clients, it does not matter what you do as regards cash management, cost reduction, redundancies or other similar measures. Your company will ultimately go under for lack of the oxygen it needs to stay alive: sales.

In this context, what should the most logical attitude be? There are two basic lines of action:

  1. Reduce costs and spending on those activities that do not create value either for clients or for the company (red tape).
  2. Reinforce those activities that allow the company to retain its existing clients.

Main lines of action for managing client loyalty
Gestión de la experiencia del clienteMixture of rational and emotional factors; clients are not only "homo economicus," but also react, positively or negatively, both to rational and emotional stimuli. Multi-channel.Complaint and claim managementCritical factor: the quickest way of getting rid of a client is not providing him or her with a good solution to his or her problems.Internal marketing campaignsAlso an essential critical element; it is necessary to "sell" the benefits of a client-centric culture to company staff.Prevention is better than cure

  • Client data analysis.
  • Alert and alarm systems to identify clients thinking about taking their custom elsewhere.
  • Client portfolio allocation.
  • Client management programmes.

Relational marketing

  • Avoid aggressive sales techniques.
  • Use of softer sales techniques.
  • Reinforcing ties.
  • "Hunter" sales people should be replaced by "farmer" sales people.

Work on client retention

  • Retention commandments.
  • Convincing, well-worked arguments.
  • Professionalism.

Work on strengthening tiesCustomer relationships should involve more than just limiting the loss of clients, and build lasting ties.Brand experienceEmphasis on emotional branding.Creating exit and change costs

  • Create emotional ties with people.
  • Create emotional ties with the brand.
  • Provide customers with amenities, facilities, pleasure and enjoyment.
  • Privileges and benefits for loyal clients (services and products for improving daily life, avoiding the creation of persistent clients).

Much has already been written about the first strategic line of action (cost reduction). As regards the second, the key guidelines are as follows:

  1. Achieve the highest levels of client satisfaction possible (it has been shown that a good customer service does not cost more and is actually more profitable).
  2. Implement loyalty programmes geared, at least, to the clients comprising the core of the business (the classic 20% of the Pareto principle which no company can afford to lose).
  3. Implement intensive programmes keyed to retaining and reducing the loss of custom.
  4. Re-orientate business management towards relational approached, making sure to strengthen ties with or engage the most valuable clients.
  5. Take firm steps towards creating and consolidating a client-centric culture, which is the basis of everything: if staff members are not decidedly client-centric, the company will continue to lose customers and ultimately go under.

For those who have not yet started to work on consolidating the loyalty of their clients, or for those who have just started to think about doing so, the table above contains the main lines of action. We cannot afford to let our clients abandon ship, since they are our most valuable asset.