Bogosi Motshegwa | How TO Keep Your Customers - A Customer Retention Hack

What about retention?

Think about all the companies that eventually failed and died. The issue was not necessarily getting customers, it was keeping them. When Blackberry died, customers switched to better offers. Acquisition and Retention are two sides of the same coin. You must be well considered in doing both. You must acquire and retain.

When Kodak was Kodak, it didn’t die because it failed to recruit customers, it largely failed because it couldn’t keep them. Nokia, Joshua Door, 2go, Geen & Richards, and any other brand that was once successful, they all die an excruciating death because customers leave. If customers leave and never come back, your chances of attracting new ones get slimmer by the second.

What comes first, acquisition or retention?

Of course; you must first gain customers in order to keep them, but once you have them, keeping them brings more customers. Acquisition may come first, but retention becomes priority. The retention of customers begets new customers, that is to say; a business's ability to keep its existing customers satisfied and loyal is a significant driver for attracting new ones.

Retained customers, although not new acquisitions, typically increase their spending over time.

Before exploring customer retention, it’s key to remember there’s no silver bullet—staying competitive still requires ongoing R&D, product improvement, innovation, marketing, and brand building.

The psychology behind retaining customers

Did you know that people who are disappointed, and their disappointments get resolved; are happier and more satisfied than those who had no issues at all?

This is a little bit dramatic but highly relevant; people who face near death experiences tend to appreciate life a little bit more. The psychological point being made here is the intense emotion that is felt, post the event. It is those intense emotions that create the appreciation or provide an empathetic perspective to the situation or experience.

Customer Retention is about appreciation

The key concept that can be extracted from the above is ”Appreciation”. Appreciation is about recognition and the empathetic understanding that something or someone is important and valuable. This is what happens when one survives a traumatic or what would have been a tragic event. This includes customer dissatisfaction that may occur pre-, during and or post a transaction.

If we bring this into the world of business; we can borrow some principles, where trauma could be experienced through the discomfort and pain of customer dissatisfaction. Examples of dissatisfaction could be; a claim that is not paid out, a promise not kept, a complaint that is ignored, a declined request, bad attitude, the list could go on.

Customer acquisition is a promise made, and customer retention is a promise kept. When you acquire a customer, you are courting the customer and bringing all the bells and whistles. At this stage of the relationship that is yet to form, the customer has not experienced you yet, as such, the impression and perception created are based on a promise made.

The problem isn’t that something went wrong, it is the act of not resolving the problem. You see; problems and mistakes will always happen, these are expected, hence they can be forgiven. What is unforgivable is unresolved dissatisfaction, because that is not a mistake, it is blatant and deliberate action that consciously ignores the cries of customers. When a disgruntled customer decides to switch to a competitor, they don’t leave or switch because a mistake was made, they leave because they feel unheard, unseen and unappreciated.

As a business, discomfort is your biggest asset

When everything works and does what it is supposed to, nobody notices and maybe nobody cares. Usually, logic says one must avoid discomfort, and you set out to do everything right, to avoid discomforts and disappointments.

That may be a missed opportunity, because without discomfort and pain, there’s no opportunity to resolve and make right, without that opportunity, there’d be no opportunity to make your customers feel appreciated. True appreciation is not felt during a transaction, pleasure might be felt, but not appreciation.

Look at this:

Nobody feels appreciation when purchasing electricity for example, in fact, electricity is a grudge purchase.

Here’s the appreciation point: Even if we pay for the electricity, we feel appreciation, because we understand the pain and discomfort of not having electricity. So when Eskom tells us that they are working hard to avoid loadshedding, it gives the impression that they care.

Despite the fact that South Africa should not be experiencing load shedding, the absence of it leads to increased appreciation for those in power, even though it is their duty to prevent it. So, upset and disappoint your customers, if you want to keep them. But don’t just upset and disappoint them, resolve the disappointment, discomfort or pain. Fix the problems as quickly and as effectively as possible.

My hypothesis is that if a company deliberately created customer dissatisfaction and resolved it, it would, dear I say; invariably create the most satisfied customers, as per Tedeschi & Calhoun.

But you actually don’t have to engineer the problems. We are human, we make mistakes, we forget, we stumble and fall. Your company and the people that work for you will always make mistakes.

View complaints and problems presented by customers not as occurrences that should never happen, but stare at them with glee and excitement, because for every problem, discomfort, pain and dissatisfied customer, is an opportunity to create the appreciation effect.

Instead of investing in efforts to try to avoid problems, invest in solving them. As a company, your systems are already geared towards a seamless acquisition process, but once the customer is recruited, generally, there isn’t a process that ensures retention. Having a CRM strategy isn’t what I am referring to. A database of your customers and a few behavioural insights isn’t what I am referring to. I am referring to spending time solving problems. If you run a business, to think or not anticipate problems shows lack of risk assessment.

Build a team, systems and processes that enable you to solve problems like your life depends on it. Even if you sell average products or offer quite standard services, customers who've been shifted from pain to joy by their problems being solved will feel immense satisfaction and appreciate your efforts. You will become the best company, not by some random or arbitrary measure, but by how people feel.