First of all, if you don't have mechanisms in place for measuring the total life cycles and turnover patterns of your clientele, you need to create some. If you can't measure a problem, you can't track it -- which means you can't fix it. What is the lifetime value of each customer? How long do your customers tend to stay? What are their reasons for leaving?

2) Validate

Next you need to validate what you think that data is telling you. This is where bringing in a third party with expertise in client retention can really pay off. Your customers may not be telling you the truth about why they're leaving simply because they don't want to get into a big confrontation about it over the phone. But if they're talking to an objective outsider, they will feel freer to express their dissatisfaction in useful detail. Even your own employees who handle complaints may feel the need to gloss over those comments if they reflect poorly on their managers -- another reason third-party validation is essential.

3) Measure

Once you know why you're losing customers, you can plug those leaks effectively and set goals for improvement. If service is the problem, you can make specific service improvements. If customers see insufficient value in your products, then maybe you need to work on how you communicate that value -- or maybe you need to develop new products. Your customers' behavior can help you adjust to market changes and stay successful -- but only if you understand that behavior.

To recap:

1. Develop the appropriate metrics for your customer life cycle and turnover.
2. Validate the data, especially reasons customer leave, using a third party.
3. Now that you understand why customers leave, take actions to improve your company in ways that will keep your customers buying from you.

How are you addressing your loyalty and retention issues? I'd love to hear from you. 

by Clay Spitz     Partner, CMO     832.444.7318 or Clay@ChiefOutsiders.com