How to Improve Customer Retention

(with Shep Hyken)

How to Improve Customer Retention
Shep Hyken is a customer service and experience expert, and the chief amazement officer of Shepard Presentations. He is a New York Times and Wall Street Journal bestselling author and has been inducted into the National Speakers Association Hall of Fame. 

He is the author of eight books including his most recent book, I’ll Be Back: How to Get Customers to Come Back Again and Again. In today’s episode, we’re going to discuss the key takeaways from his book, as well as Shep’s tips on how to become a bestselling author and create an online course. 

Key Takeaways

In today’s episode, we will cover the following key takeaways:

  1. The cost of acquisition is far higher than the cost of retention.
  2. To get our customers to come back, we have to provide unique value and find something to differentiate us from our competitors. 
  3. We will ruin our customers’ loyalty if we have apathy, if we are rude, if we have complicated systems, and if we have slow response times. 
  4. To become a bestselling author, we not only have to write a good book, but we also have to have a good marketing strategy and plan. 
  5. When building an online course, we should first determine what we want our customers to learn, and then begin by drafting an outline. 
  6. In our courses, it is a good idea to create different exercises to help keep our customers accountable. 

How to Get Customers to Say, “I’ll Be Back”

Getting our customers to come back to us is so important. While it is great to get new customers, we will see greater benefits if we increase customer retention. 

“The cost of acquisition is far higher than the cost of retention,” Shep said. What do we spend to get a customer to come in the very first time? What do we spend to keep them? Often, it costs us much more in marketing and advertising to attract a customer than it does to keep one. Not only that, but if we can get our customers to come back to us, this means they likely like us enough to recommend us to others. 

The cost of acquisition_Blog

In Shep’s book, I’ll Be Back: How to Get Customers to Come Back Again and Again, the most important takeaway is found in chapter 15. Here, he has a six step process we can go through to create the “I’ll Be Back” scenario we want with our customers. When we go through this process, we will likely find new ways we can improve our business and stand out from our competitors.

   1. Ask, “Why would someone do business with me?” 

What makes us different from our competition? Do we have a different product? Are our store hours different? What value are we providing to our customers that is unique? Our business has to have something that sets us apart from our competition, and if we don’t know what that is, we should take the time to figure that out. 

There was a car dealership Shep bought from that would deliver your car to you. If you had a problem, they would come pick up your car, give you a temporary replacement vehicle, fix it, and then bring it back. This service makes them stand out from all the other car dealerships. What part of our business makes us stand out? “Find out the reason why somebody does business with you,” Shep said. 

   2. Ask, “Why would someone do business with my competition?” 

Why would someone do business with our competition? We should create a list and write out all of the reasons a customer might choose our competition over us. 

For example, if I worked in the fast food industry, I might compare my business to McDonald’s, A&W, or Chick-Fil-A. Someone might choose McDonald’s because of their cheaper prices. Others might choose A&W for their root beer. Others might choose Chick-Fil-A for their customer service. Once we know why our customers would choose our customers, it will be easier for us to think of ways we can be different. 

   3. Keep the pace.

We should make sure there isn’t something all of our competitors are doing that we are missing. We want to stay on top of industry trends and keep up with our changing customers’ wants and needs. 

“If [the competition] is doing something that you’re not doing and you should be doing, start doing it, but make it different,” Shep said. “Do something a little bit different to make it your own; make it better if you can.”

If [the competition]_Blog

   4. Go outside of your industry and ask, “What do they do that makes me love them?”

We should look beyond our competitors. We should go outside our industry, find businesses we love, and ask ourselves why we love them. What do they do so well that makes us want to come back again and again? We can create a list of all the companies we enjoy, and then start making notes of what they do that we love. 

For one of Shep’s clients, a company they loved was Amazon. So Shep asked him, “Why do you love Amazon?” He said, “I love that as soon as I place the order, I get an email. They email me when the product ships, and again, when the product has arrived.” Once we’ve done this, we can move onto step five. 

   5. Write down how you can incorporate what you love about other companies. 

As we write down what we love about other companies, we can ask ourselves, “How can I do what they are doing? How can I apply this to my own business?” Sometimes, this will require us to read between the lines. We have to determine why we love what they do. 

Shep asked his client who loved Amazon why he loved getting emails. Does he really just like getting emails? Or is it something else? The client didn’t necessarily love emails; he loved getting information, and what Amazon was doing was delivering information at each step in the order process. This gives their customers a sense of control because they know what is going on. 

As a result, the client decided he needed to give his customers more information about their orders. They weren’t an e-commerce company, but by doing a few extra touch points with their customers, they helped the customer feel more in control. They were able to adopt something from Amazon. 

   6. Go back to number 1: Why would someone do business with you?

“Did you change something along this six step process? That is when you start to make improvements,” Shep said. “And that’s what gets your customers to say, ‘I’ll be back.’”

As we begin to implement these changes, we should pay attention to our customers’ behaviour. The best measurement we can pay attention to is behaviour. How many times do our customers come in? How much do they spend? As we monitor their actions, we will be able to accurately answer the question, “Why would someone do business with me?”

4 Loyalty Killers 

Loyalty killers are the terminators. They are the things we do as a business that turn our customers away from us. Here are four ways we damage our customer relationships.

  1. Apathy. When we don’t care about customers, they will be able to tell and they won’t want to come back. 
  2. Rudeness. When we are rude with our customers, we ruin their customer experience. We can have the best service in the world, but if we have bad customer service, our customers will leave. 
  3. Complicated Processes. When it is too hard to find information or get a hold of our customer service team, our customers will go find somewhere else. They want things to be easy, not complicated. 
  4. Slow Responses. If we have slow response times, our customer will find someone else. 

“You can have the best product in the world, but if your service is terrible and you don’t make people feel appreciated or treat them right, they’re going to go try to find that same product somewhere else. They may even be willing to take a little cut in the quality of the product just to get the experience they want,” Shep said.  

How to Become a Bestselling Author 

One of Shep’s greatest home runs was becoming a bestselling author on the Wall Street Journal and New York Times. When I asked him to share his secret on becoming a best seller he said, “Success doesn’t happen by accident. The book is important but selling the book is more important.” 

While we still have to write a good book, if we want to become a bestselling author, we have to focus on marketing to make sure enough people buy it. To become a NewYork Times bestselling author, we have to sell 5,000-10,000 book copies within a week (Source: Self Publishing School). Even if we write an incredible book, we likely won’t hit that mark without strong marketing efforts. 

“For months, I did nothing but promote. I did everything I could to promote the book. . . .  That’s the secret,” Shep said. “I was told that no book becomes a bestseller without a plan, at least in the business genre.” 

Before his book even launched, Shep asked all of his clients if they would be interested in buying his book, so that as soon as his book launched, people were buying it. He also went on podcasts and shows. He made a goal to get on 50-75 shows the week leading up to his book launch. By focusing on his book promotion, even before his book came out, Shep became a bestselling author. 

How to Build an Online Course

In addition to writing books, Shep also creates online courses to help grow his business. If you go through all his courses in the time he prescribes, it will take at least a year and a half to two years to get through all of it. 

In his experience, he often writes a book first and then uses the content from his books to build a course. Since a book is already organized into chapters, he can easily turn it into a course with different lessons. 

“Basically, you want to create an outline and [determine] what it is that you’re trying to do,” Shep said. When he decided to write a course, he would ask himself, “What do I want my clients to do? What do I want my clients to know?” Then, he would create an outline with a step by step process and develop the course from there. 

In Shep’s courses, he often teaches one concept in a lesson and then includes an exercise the customer can complete. Sometimes this exercise is in the form of a quiz or questions in a workbook. After the exercise is complete, Shep encourages his customers to create a group and have a discussion. 

“The whole idea behind this meeting is it forces people to bring their workbooks and prove that they did the work. It’s like a watchdog effect. We’re watching you . . . [and] if you show up unprepared, you’re going to be very embarrassed,” Shep said. 

Shep uses a learning management system with his courses to help him track his customers’ progress. This way he can help keep them on track and make sure they aren’t falling behind or struggling with a particular concept. 

Connect with Shep

Thank you so much Shep for sharing your stories and insights with us today. To learn more about or connect with Shep:

Next Steps

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    About the author

    Nathan Gwilliam

    Nathan Gwilliam

    I help organizations navigate tectonic shifts that are transforming the business landscape, so they can optimize marketing, accelerate profits, and make a greater difference for good.

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