How Important is Retention?

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

How Important is Retention?

For service providers who understand the cost of customer acquisition, retention is an important metric. In fact, Wall Street calls it churn. It has to remain under 2% to be considered under control.

For agents, retention is just as important. While you may not have calculated what your customer acquisition costs are, do you want to lose a customer? I don't.  It's far easier to sell to a customer (past or present) who trusts you and has history with you than to sell to a prospect that doesn't know you yet.

For agents, the retention problem surrounds contract renewals. Carriers have different policies. In a recent case, the contract renewal went to another agent. He had a better relationship with the new IT director. Kind of sucks since he is getting paid to do nothing but renew the business I sold. That's what carriers think too. Why are we paying on renewals?

I've had my focus on other business needs and it cost me a couple thousand per month. I don't have a system in place. And as Karin Fields of Microcorp writes on her blog:

"Who would think there are so many things to consider with trying to maintain the base you already have? But that is EXACTLY the problem most Agents have is understanding and managing the complexity of retention.  You have to consider the Carrier's policies; you have to develop a tracking system if you don't have access to a system like Nautilus; and you have to have a pro-active way to interact with your customers to maximize your efforts. And that is what I want to talk about today - the Yearly Review."

Today, a yearly (or even a quarterly) review would be wise simply to gain more Total Telecom Spend. With SAAS, conferencing, and energy, there are questions you can ask to get new business (even if you lose old business).

Security is another angle. Design a couple of questions to see if a managed security service (like firewall or IDS) would be something for the client to look at. If the questions are creative enough, it will have the client looking at you in a new light. (Hopefully, a greener light.)

And with Cloud, you can have a conversation about collocation, email, critical business process applications, and more to identify ways that your clients can leverage services you can deliver.

Easy to say. A challenge to implement. (Maybe it will be a TCA webinar topic in 2011). How do you implement a retention system?

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