Customer service metrics should be a key performance indicator in your business when it comes to capturing new referrals and retaining your current client base. Customer retention is also a key piece of business success. That’s why we’re kicking off a new series on how to maximize client retention. To kick things off, we’re highlighting the importance of word-of-mouth marketing.
With over three-quarters of mortgage clients using a different lender for subsequent loans, the mortgage industry could use less churn. Although the need might be most pressing for the mortgage industry, customer retention is a critical piece of any sales professional’s success. In fact, you’ve likely heard that it’s significantly more expensive to attract a new customer than to keep the customers you already have. Indeed, “One customer, well taken care of, could be more valuable than $10,000 worth of advertising.” You may have heard this quote by Jim Rohn before. It’s a popular one — and for good reason. Customer loyalty is arguably the best indicator of your business’ longevity.
The Importance of Word-of-Mouth Marketing
Word-of-mouth is a very powerful marketing tool that can work for or against you.
People trust the opinions of those in their community. According to Nielsen, 92% of consumers trust referrals from people they know over all other forms of advertising.
Because recommendations are so important, this is how many discover their favorite businesses. Take restaurants as an example. You might have a friend who tells you about this amazing place to eat. You decide to go at the friend’s recommendation. It has a great atmosphere, delicious food, and amazing service. Now that restaurant will likely be your first thought when recommending a restaurant to others.
Something so simple as a positive experience turned into a recommendation from a friend, which developed a lifetime customer. The positive experience leads to a steady stream of referrals — all entirely free marketing for that business, through word-of-mouth.
Although this is a great scenario for a positive experience, the opposite also holds true. Indeed, one bad experience turns into a recommendation-to-never from a friend. This creates a lifetime anti-fan, which floats downstream through that person’s extended network.
Word-of-Mouth and Technology
Positive and negative experiences travel even faster and further in the information age. Reviews are everywhere online.
And now that more than 50% of shopping is done online, reviews are usually the first thing a potential buyer will consult before making a purchase decision, whether they’re making a decision as big as buying a car or as small as downloading a free mobile app. Consumers even view the lack of reviews as negative. If you don’t have anyone saying anything, you must not be noteworthy enough to be considered as an option — not worth the risk.
No matter what kind of service-based business you’re in — whether you’re a lawyer, automotive sales consultant, loan officer, insurance benefits advisor, hair stylist, financial planner, public relations specialist, chiropractor, or wedding coordinator — the experience you deliver is your key to referrals, customer retention, and ultimately… your success.
Build & Leverage Positive Word-of-Mouth
Since how people talk about your brand is so important, it’s critical to set yourself up for success. Creating a consistent and enjoyable client experience is a great place to start. Next, make sure that you have claimed your business on Google. Review your rating and reply to comments often. You can even encourage promoters of your brand to leave a review about their experience. Add a custom button to your app to make the review process easy. Finally, make sure to use the positive feedback you receive as social proof when interacting with potential clients.