KEEPING THE REVENUE BUCKET FULL THROUGH RETENTION
When I was a club manager, I remember acquiring new Members was my main priority. Or so I thought it was my number one responsibility. In my world, Members are customers who not only pay for the right to walk in the door, but if you make a mistake, they still come back the next day. In the rest of the world, distraught customers never return but speak ill of you and your organization across town.
Maintaining a full Member Roster is paramount for a club’s survival. Focusing on new ones is counterproductive to growth if you continually replace those who quit. Treating Members like Kings and Queens to be raving fans is equally, if not more, important.
It’s the same in every business, including nonprofits. Growth and sustainability go hand in hand with retention.
Keeping those involved with your organization is paramount to long-term sustainability and capacity building. To think otherwise is naïve.
Naïve is how you could describe me in my early club management days. I was in the military managing Officer’s Clubs. My knowledge was limited at the time because I looked at the new initiation fees and growth in the dues, but I ignored a simple truth. We were keeping those happy who were already contributing to our profitability; it cost very little, while new Member acquisition was ten times more expensive.
Once I got my thinking straight (I pulled my head out of…) and developed a comprehensive Member Retention process, the clubs prospered.
But that was then; this is now. Generating leads and performing online client, customer, or patient acquisition is how business is conducted in the digital age. Everyone with a smartphone or computer searches for goods and services online. They can search by brand, item, and cost. You name it. What is being said about the company or the brand online on social media? How is XYZ Company doing against its competitors?
These are the types of evaluations going on routinely. If businesses wish to stay atop their positions on social media, they had better respond to every comment, good or bad.
However, nonprofits might be different from the typical small business. Sure, social media is a valuable tool and should be maximized. New interested parties might seek you out after seeing your postings online if you are consistent, frequently, and consistently. If negative reviews are posted, it’s not the end of the world. Responding sincerely to every comment can mitigate negative reviews.
Like the title’s image, it doesn’t matter how much revenue you bring in; if it is draining out of your business, what’s the point? The holes in your customer retention program need equal attention, lest you run empty.
If your new acquisition revenues cannot exceed efficiency or poor retention, you will not sustain them.
We all know that the value of a customer (or donor, patient, or client) far exceeds that of a new acquisition. If a customer remains loyal for an extended period, it is easy to calculate Customer LifeTime Value (CLTV). CLTV equals the length of the average donor times the average dollar contributions over time minus the cost of acquisition and fulfillment. This is a simplified version of the formula. You can learn quite a bit more here.
Retain Donors by Making Them Sticky
Service is typically the area of focus for a company to ensure the satisfaction of its stakeholders. We also know that leaving it to only a single department is far from correct. Business Insider says more than 20% of online reviews are fake. While it is hard to control what a disgruntled employee, hacker, or even a real customer might espouse, a solution is far from your control.
Everyone on the team should be involved with reasonable customer satisfaction. Of course, that is easy to state, and it’s not so easy to initiate and control.
Online Reviews and Your Online Presence
In this digital age, customer retention is built by online reviews. Those critiques shape the opinions of researchers as well as referrals from friends. According to Myles Anderson of BrightLocal on theSearchEngineLand and Blog, as many as 88% of customers trust online reviews.
Conversely, the same holds true. Negative reviews can kill sales, sales momentum, and productivity of a company, eventually weakening its customer base by having to trim expenses to meet revenues. It’s a downward spiral to the bottom.
Reviews Tied to Individual Performance
Each time an employer evaluates an employee, there are chances that the most recent actions influence the report. It’s human nature, almost unavoidable unless there are excellent records of employees interacting with customers, etc. Now there is.
Customer satisfaction reviews and online surveys aligned with the business and those operating it can be tied directly to individual performance. This is a terrific tool to evaluate periods when you do not oversee employee actions, but from the customers’ perspective, their view says it all.
