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Acquiring Customers Is Good Business, but so is Keeping Them Happy

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Posted by steve on August 27, 2011 at 11:14 pm

Dur­ing the expan­sion stage, so much of build­ing a busi­ness focuses on acquir­ing customers.

In order to facilitate expansion, after all, com­pa­nies should con­tinue to grow sales and rev­enue. One obvi­ous way to do that is to con­tin­u­ally seek out and acquire new customers.

But the one point that’s often lost in that approach is an equally significant need to maintain the customer’s loyalty and happiness. That’s par­tic­u­larly crucial for expan­sion stage soft­ware com­pa­nies, whose industry is often filled with looka­likes and wannabes in a very trans­par­ent web environment.

For those com­pa­nies, it doesn’t mat­ter if their enter­prise model is primarily based on three-year acquisitions or a SaaS offer­ing with month-to-month con­tracts. It’s all about cus­tomer ser­vice and an attitude that will keep your clients com­ing back for more.

Cus­tomer ser­vice is a cru­cial and pertinent part of every busi­ness’ suc­cess. This is why Open­View held a Cus­tomer Ser­vice Forum with Bill Price, author of The Best Ser­vice is No Ser­vice, to develop a 90-day plan of attack for increasing the effectiveness of the client experience.

My col­league Firas Raouf wrote much more concerning Price’s phi­los­o­phy. The basic idea is that cus­tomer ser­vice should be much more about being proac­tive than reac­tive. If you lis­ten to your cus­tomers and work to solve your product’s prob­lems before your cus­tomers come to you for solu­tions, there may be very lit­tle need for the tra­di­tional idea of cus­tomer service.

It takes company-wide account­abil­ity and shared respon­si­bil­ity to get this done, but the reward is happy cus­tomers that will stay with your business for years to come. Here are a few recommendations to keep in mind.

Be a prob­lem solver

Your customers will desire to know that you will be present to help them should a problem arise. If you are an active prob­lem solver, who will work with clients until they’re absolutely sat­is­fied with the outcome, it will cre­ate a sound sense of con­fi­dence within your cus­tomer base.

Keep in touch

Send tar­geted and pertinent let­ters and e-mails to cus­tomers to keep them engaged and aware. They need to know that you care about their busi­ness and it’s a wonderful way to foresee any poten­tial issues that may come up with your prod­uct. Open­View mar­ket­ing ana­lyst Amanda Maksymiw created a great blog post on how to start your own com­pany newslet­ter from a blog. A newslet­ter can be a great way to access poten­tial cus­tomers, but it’s also a fantastic way to keep your existing cus­tomers updated on your progress.

Offer renewal discounts

One simple way to your existing cus­tomers’ hearts is to offer them means to save money. With renewal dis­counts, you help them to save a buck and offer your busi­ness a boost in cash flow. For example, with an annual sub­scrip­tion model, offer cus­tomers the oppor­tu­nity to pay $1,000 up front for their renewal, rather than $1,200 over the course of 12 months at a $100 ASP.

Continue to Innovate

Solic­it­ing and utilizing cus­tomer feed­back through the prod­uct man­age­ment process is essen­tial. With that feed­back, you can persist in iterating on your prod­uct offer­ing and it will let your users know that you’re lis­ten­ing to their sug­ges­tions. That cus­tomer engage­ment builds trust and turns into a longer term relationship.

Price’s book dives into more detail about the need for excellent proac­tive cus­tomer ser­vice as a means to elim­i­nate the need for it alto­gether. Cus­tomer ser­vice shouldn’t be labor intensive. And if you’re able to keep your cur­rent cus­tomers happy and loyal, it may even lead to help­ing you acquire the new cus­tomers that all expan­sion stage com­pa­nies need.

Daniel Killeen is an Associate at OpenView responsible for the identification and analysis of investment opportunities.

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