Retentionomics: Why Lasting Relationships With Customers Make Sense

It has been well documented that it is much more cost-effective to focus on nurturing relationships with existing customers than it is to find and convert new ones.

Forbes Insights and Sailthru recently published a report “Retentionomics: The Path to Profitable Growth” based on a global study of 300 retail and media executives designed to find out if, and how, they take advantage of the benefits of retention strategies and how that impacts growth and performance.

The report reveals that while the benefits of retention are widely known, companies significantly underutilize them and routinely fail to make a strong connection between retention and its impact on revenue. In short, there is tremendous room for advancement for all companies—to work smarter, not harder.

The report analyzes companies that excel at retention, or Retention Gurus, which were 14% of the sample, and those that focus on acquisition, or Acquisition Athletes (14%). The remaining 72% of respondents did not skew their budget allocations toward either acquisition or retention, and/or have not experienced the same success with their customer acquisition and retention goals.

The report also delves into the reasons why most companies still struggle to take advantage of retention’s benefits, the results this state of affairs can lead to, and key strategies to correct it.

Here are the top findings:

Focusing on retention pays off. More Retention Gurus significantly increased market share over the last year (14%) compared to Acquisition Athletes (5%).

Retention Gurus scored better in terms of customer churn. Forty-five percent of gurus did not have increases
in churn over the last year, compared to just 33% of Acquisition Athletes. In addition, 88% of Retention Gurus are exceeding their customer acquisition goals.

Inertia is what keeps most companies from becoming Retention Gurus. For most companies surveyed, the primary factor in making decisions about retaining and acquiring customers is inertia—84% of Acquisition Athletes report doing things “the way they have always been done” when defining customer strategy, compared to just 63% of Retention Gurus.

Companies have not shown signs of trying to break this inertia by investing more in retention.Seventy-nine percent of acquisition budgets increased over the last year compared to just 42% of retention budgets. Half of all Acquisition Athletes made no change to their retention budget.

Taking full advantage of customer retention strategies requires rethinking budget allocations,and investing more in technologies that can help companies better achieve and measure retention goals. Currently, 37% of Retention Gurus and 35% of Acquisition 

Athletes cite technology limitations as a barrier.

Retention Gurus know they need to allocate more of their budget to retention. Lack of budget is a bigger barrier to measuring retention rates for them (23%) than it is for Acquisition Athletes (7%).

Source: www.forbes.com

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Westchester Networking for Professionals (WNFP) is a business networking association dedicated to helping small businesses and entrepreneurs develop, expand and grow. We offer affordable opportunities to help create a positive impact and advancement in your business interests and personal quality of life to take you to the next level.
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Dr. Ruth Mentors Cofounders On How To Better Their Business Relationships

Dr. Ruth Westheimer is best known as the tiny sex therapist you perhaps know from late-night cable from a decade or two ago. But once a year, at the FORBES Under 30 Summit, she moonlights as a business relationship therapist. “Some of the issues you are going to face are like with couples,” she said matter-of-factly in a recent session. “You have to be honest, and you have to trust each other.”

First up were Brittany Hodak and Kim Kaupe, cofounders of ZinePak. The two met in October of 2010 and incorporated their company in January 2011–giving them just 90 days in which to get to know each other. Then, this year, Hodak and her husband moved to Nashville. “We went from quickie marriage to now we’re in a long-distance relationship,” she said, delighting the good doctor.

“Do you have a fixed time that the two of you talk to each other?” Westheimer asked, and then echoed advice every romantic couple in a long-distance relationship hears: “Once a week to see each other on all of your wonderful technologies–once a week is not enough.”

“What worries me is I can’t tell you to hold hands,” Westheimer continued in the manner of any relationship counselor, “because you [Hodak] are in Nashville and you [Kaupe] are in New York. But what I want to emphasize is: You have to put in the time.” And like any good relationship counselor, she invited the partners back for a check-up in three months.

Westheimer’s second clients of the day were Adam and Ryan Goldstone, the twin cofounders of Athletic Propulsion Labs, a sneaker company. “Thank God that one has a beard,” Westheimer said of Adam.

They didn’t actually seem to be much in need of couple’s counseling. “If you’re on the same page, you’re striving for the same goals,” Ryan told Westheimer. ”We’ve gone through everything together, so Adam has my best interests at heart.” As for how they solve disagreements, Adam had a simple solution: ”Just go with what Ryan says.”

But lovely though things are now, Westheimer warned that there would one day be trouble in paradise. The brothers both insisted that nothing could come between them as business partners, because no matter what, the business would always come first. But what if one of them were to, say, meet a romantic partner who may take precedence over a brother?

“Business comes first, everything else comes second,” Adam insisted.

Said Westheimer, “You better find a partner who agrees with that!”

Perhaps Westheimer’s special sessions really do get at a deeper truth. Are business and romance really so different?

Source: www.forbes.com

Image Credit: Uyen Cao

ABOUT WNFP
Westchester Networking for Professionals (WNFP) is a business networking association dedicated to helping small businesses and entrepreneurs develop, expand and grow. We offer affordable opportunities to help create a positive impact and advancement in your business interests and personal quality of life to take you to the next level.
Stay Connected with WNFP!

Managing Stress While Running a Business

Owning and running your own business can be very stressful. Business is very unpredictable and always changing. Leading almost every entrepreneur to experience high levels of stress periodically.

In recognizing April as National Stress Awareness Month, we want to share with you some strategies we found to help you deal with the stress of running a business:

1. Accept responsibility
2. Think positive
3. Understand its okay to make mistakes
4. Talk about the stress with others
5. Plan your day and set a schedule
6. Stay organized
7. Identify the source of your stress
8. Eliminate or alter the issues that cause your stress
9. Find the right work/life balance.

These strategies will help you reduce stress and run your business more successfully. Stress can lead to many health problems and it's very hard to run a business from a hospital bed or doctors office.

It's normal to experience stress, but how you handle your stress makes all the difference. Don't let stress ruin your life or business. Tackle it with the 8 strategies above and start living a healthier more enjoyable life.

What are some techniques you use to handle stress? Comment and share below.

ABOUT WNFP Westchester Networking for Professionals (WNFP) is an organization consisting of professionals and entrepreneurs which focuses on the success of our Members. We help our Members establish lasting relationships and generate new business opportunities towards the growth of their business.

Creating the Perfect Strategic Plan for Your Business

Did you know that October is Strategic Planning Month? Strategic planning is setting a goal that your company wants to achieve, and then designing steps to achieve this goal.

Some small business owners and entrepreneurs choose to create and develop their strategic plan on their own, while others hire an outside consultant to help to accomplish their company goals.

October is a great month to search the internet for qualified professionals who can assist you in planning for your business's future

If you plan to take the time to plan and create strategies on your own for your business check out the software below to help you get started:

SmartDraw (software)-  SmartDraw will help make your strategic planning process a breeze. Download the templates and get started on your strategic plan today. Find hundreds of professionally designed templates.

Another source of information are book to help you with your strategic planning process:

"10 Steps To Successful Strategic Planning", 
by Susan Barksdale & Terri Lund

"Strategic Planning", 
by George A. Steiner

"Strategic Planning: A Practical Guide to Strategy Formulation and Execution", 
by B. Keith Simerson

 

There is no right way to create a strategic plan, as it varies for each company and goal. The better you know your company, industry, and goals, the better chances of success you'll have.

Have you ever had to create a strategic plan? Was it successful? If not, what could have been done differently to ensure its success? Comment and share below.

ABOUT WNFP Westchester Networking for Professionals (WNFP) is an organization consisting of professionals and entrepreneurs which focuses on the success of our Members. We help our Members establish lasting relationships and generate new business opportunities towards the growth of their business.