Now is the time to start thinking about retention before you lose your clients for good and are unable to fill the hopper with new ones.
Paul Hunt (pictured) is a marketing consultant
Following the sad news re Amicus at the end of last year, we have seen in the last week two other lenders sadly announce they were either temporarily stopping lending due to funding being exhausted or considering withdrawing from the market due to prevailing market conditions and increased competition.
I fear this is not the end of lenders exiting the market and for someone who lived through 2007/8 as an employee of Lehman Brothers. Such news will undoubtedly make investors twitchy, but I strongly believe we are better placed and the lessons learnt from a decade ago will see us through this period of uncertainty.
As a broker, a smaller pool of lenders to choose from won't have an immediate impact on your business, but the lack of new customers will definitely be a concern.
In December, The Royal Institution of Chartered Surveyors (Rics)said the number of new properties being listed for sale fell for the fifth month, to a net balance of -24% – the fastest rate of decline in more than two years. Estate agents only have 42.1 homes for sale, on average, close to record lows. The number of new appraisals by property valuers was also down. The number of agreed sales fell in November, with the net balance down to -15% from -10%, and this sentiment was reflected in almost all areas of the UK.
What does this mean? Well, it says to me that existing customers and retaining more of them will be the difference between many businesses seeing out this period or not.
I see many brokers and many say that their retention is good and have administrators dedicated to this task, but I would challenge is it good enough?
This is a point I will keep returning to over the next few weeks, but let me leave you with some stats on customer retention for now:
- The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20%
- 65% of a company’s business comes from existing customers
- Companies lose 71% of consumers due to poor customer service
- 68% of customers leave you because they perceive you are indifferent to them
- A 10% increase in customer retention levels results in a 30% increase in the value of the company
Now is the time to start thinking about retention before you lose your clients for good and are unable to fill the hopper with new ones. Back next week...