Using Customer Retention to Build Your Bottom Line : Under30CEO Using Customer Retention to Build Your Bottom Line : Under30CEO
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Using Customer Retention to Build Your Bottom Line

| March 28, 2012 | 3 Comments

Many companies today are focused on obtaining new customers through innovative marketing campaigns, daily deal sites, holiday sales, and various other promotional activities.  There are great campaigns in an effort to attract new customers or clients.  The goal is to attract new customers, a new demographic; thereby, increasing sales.  At the end of the quarter or fiscal year, companies and other businesses look at the bottom-line to see an increase in sales.  The “sale”; however, is not compartmentalized from new customer sales or repeat customer sale; and yet, many of the aforementioned business campaigns focus on the acquisition of new customers.  The same goal, an increase in sales, can be achieved by focusing efforts on customer retention, rather than, or collectively with, acquisition.

With network analysis, we have the opportunity and ability to assess customer conversation patterns; a new form of determining your customer conversational network, thereby focusing efforts on retention rather than acquisition. Additionally, new customers can be sought out through these networks and conversation patterns; however, retention of a core customer base is primary with the current economic climate.  Customer retention, when combined with acquisition, forms a strong business strategy.  Some businesses already do this; however, it is not balanced or clearly defined.  Casting a net over the web and mapping the conversations and social relationships of current customers affords businesses (small and large) with the opportunity to see the pattern of discussion surrounding their company or product.

There are three important forms of networking; personal, professional, and commercial.  Commercial networking is a form of networking where we connect with others to promote a product, a good or a service.  We are mapping personal and professional networks for commercial purposes to enhance the experience of our current customers; making sure all needs are met.  Additionally, this type of network mapping can be focused on the discussion surrounding a specific type of good or service; thereby, allowing a visual perspective of conversations and online social encounters within your market.

Through network strategy, companies can detect new trends, obtain further insight into key influencers of an online community, and gain fresh and new insights on the types of discussions surrounding their business, goods, or services.  These insights are valuable, and can be leveraged for both customer and business benefit.  Knowing the value of your current customer base and gaining the value of mapping your customer networks makes the difference between potential success and having success.

Ever business, small and large, for-profit and non-profit, all need to leverage social capital and networks; this is a necessity and not an elective.  With network analysis and a better understanding of social capital, a business can improve the conversation and collaboration of their current customers and clients.  With the plethora of online social mediums, companies can determine the influencers within an online community and uncover patterns of conversations to create targeted business strategies.  The main strategy is to keep customers in an engaged conversation surrounding your business, goods, or services.  In this way, your brand is perpetually linked in conversation within networks of current customers.

Of course, these conversational patterns and networks of current customers or clients are not only beneficial for your employees, but illustrates to your customers that there continues to be a discussion surrounding your products.  This provides current clients with sustained motivation to tweet on Twitter, post on Facebook, pin on Pinterest, and upload to YouTube.  Their efforts are not without results.

Online platforms and social networks allow for collective intelligence and crowd-sourcing of knowledge.  It should be the priority of a company to tap into these conversations to increase customer retention; creating both tangible and intangible results.

Bennett Resnik is a consultant on social capital and networks, and the creator of “The Hands We Shake” lecture series on how to build, grow, and sustain social capital.  He is an expert in networking strategy and social capital retention.  Bennett advises his clients on how to locate and access social capital within their present networks and create a framework for future network strategy.

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Category: Finding Customers, Startup Advice

  • Asmith

    I’m glad to see an article about customer retention. I’ve read so many articles about customer acquisition, but it actually costs five to six times as much to get a new customer as it does to keep a current one.  In this economy, customer retention should be the primary focus of most companies.  

  • Asmith

    I’m glad to see an article about customer retention. I’ve read so many articles about customer acquisition, but it actually costs five to six times as much to get a new customer as it does to keep a current one.  In this economy, customer retention should be the primary focus of most companies.  

  • Asmith

    I’m glad to see an article about customer retention. I’ve read so many articles about customer acquisition, but it actually costs five to six times as much to get a new customer as it does to keep a current one.  In this economy, customer retention should be the primary focus of most companies.