We all know that a “Happy Wife = Happy Life”…well in business, “Happy Customer = Recurring Customer”
As companies’ budgets are continuing to be reduced or even completely frozen, it has likely extended the length of your sales cycle and is increasing your customer acquisition costs (CAC).
As a result, the sales strategy and activity you should be deploying should focus on maximizing net revenue retention (NRR) as the primary way to keep revenue coming in the door. The age-old saying “it is easier to keep a customer than to earn a new one” has never been more true. Along with being easier, it could also be said for being cheaper.
So, how do you as a company maximize NRR with the rising CAC’s? You retain your customers by providing a great customer experience and incentivize them to increase their spend with cross-sell & upsell promotional offers.
Recurring revenue is the leading indicator of a satisfied customer base. Here’s how a happy customer base will make your business happy.
1. Happy customers stay longer and try new things.
Everyone knows the “land and expand” model but it doesn’t create effective results without a great customer experience. Customers that enjoy a great customer experience know that if they have an issue then they will receive the help and support they need. This improves their satisfaction levels and retention likelihood along with it.
They’ve received a perceived value through transacting with your business and if the value is net positive for them, then they are likely to spend more and try new products that you will offer. That earned trust and value association is much more valuable and cost-effective than when it’s lacking while going after new customers.
2. Happy customers are the best advertisers.
Whether it be word of mouth, customer testimonials, product reviews or just the overall reputation of your business, happy customers are a great selling point.
Often in new business prospect meetings, a common sales prerequisite is learning what other companies using your service. Some like to use this information similar to when you need to put down references on a job application. The prospect will reach out to your existing customers and ask them about you to better inform their buying decision. The cherry on top that helps close sales is when they hear about how great of an experience your customers have and your customers do all the selling for you.
It’s simple. Provide the best customer experience surrounding your product or service and leverage the voice of your happy customers to build your brand.
3. Happy can come with a premium price
With rising costs associated with inflation, many companies have in turn charged more for their products and services. This premium is often better received when the customer’s experience has been positive, they’ve received value and adopted the product or service well. When supported, treated well and treated right, a loyal customer base is willing to pay a premium, even in times of limited spending.
Look at Amazon. The industry giant provides an extremely convenient shopping experience, has a customer-friendly return policy and has over 168 million subscribers to its Prime subscription service. We’re not here to make any assumptions, but we’d be willing to bet not a single one of you would cancel your Prime subscription if they DOUBLED its annual fee. Talk about customer satisfaction and perceived value.
Amazon makes me happy by providing a great customer experience. Happy me spends more money with Amazon without thinking. Amazon, please, take my money.
We can’t all be Amazon, but these principles are the core foundation of all successful businesses. Provide a great customer experience now and let it pay dividends weeks, months and years from now. Happy customers will be recurring customers and an extension of your sales team, for free.
Let’s get to work.
Prescriptive Profits #24