The 5Rs of proactive customer profitability management, are based on retaining clients longer, by creating more value. Let’s drill down into the benefits of improved customer loyalty and retention that each of those 5Rs delivers to your business, and help you develop your action plan for rapid results.

5 Results of Improved Customer Loyalty and Retention

  1. Stay in Business When You Retain Your Most Profitable Customers

Most companies rely on less than 15 customers for the profits they need to stay in business. If you lose just one of those “whales”, you’ll need about 15-25 “average” customers to replace those profits. Quick, can you think of 15 new prospects you could close in a hurry if you needed to?

You’re not alone; customer attraction and retention just doesn’t work that way. So it’s absolutely essential that your retention strategy involves multiple levels of relationships in these accounts and that you’re seen as a value-add supplier by them. If you read my blog at the beginning of August, you’ll note that I offered some tough love to those who think that retaining clients is about lunches, golf, swag, and event tickets – it takes much more to build a relationship with your most critical customers and make sure that when they’re looking for a value-add supplier, it’s your history with them that they think of first, not your competitors’.

Tough Love: What are you doing this month to retain your best customers, beyond lunches, events, golf, pens, and mugs?
Hint: improved customer loyalty and retention is all about the value you deliver, not about the “stuff”.

  1. Almost Effortlessly Increase Sales and Profits When You Ramp Up Your Marginally Profitable Customers

It’s estimated that 5-30% of your customers could do more business with you at any point in time. Go get it!!! Otherwise, your competitors will, when you expose a chink in the armor of your retention strategy. One of the tools I use with my clients is called A.C.R.E.S of Opportunity, and it maps out exactly where you have business opportunities that your sales teams may not even have spotted. It’s a powerful tool for accountability that simplifies sales management and drives new business.

Tough Love: How are you actively looking for opportunities to help your clients even more with the products, services, or expertise you offer?
Hint: retaining clients is not about selling; it’s about serving.

  1. Double Your Profits When You Restore Your Unprofitable Customers to Breakeven or Better

Once again, I’m fortunate. I get to work only with clients who are very good business for me, and profitable, but in larger organizations, that’s not always the case. When I first take my clients through the Customer Profitability Diamond, they often find that up to 40% of their customers are unprofitable!

One of the benefits of a good customer retention strategy is not to simply fire those clients and lose volume, but instead, to get them turned around by determining exactly what you can do to help them be profitable again.

Research done by Harvard supports that your unprofitable customers often cost you 100% of the profits from your most profitable customers… and that simply bringing them back to break even will double your profitability. The fascinating part of the work I get to do is that I often see relatively low-ranking employees stepping up to own their part of the Restore process, including:

  • a 23-year-old accounting clerk who took a different approach to slow-paying customers and turned around their receivables challenges within about 60 days, and
  • a sales team that committed to taking their customer profitability ratio from 2:1 to 5:1 in the first year, and when they achieved 5:1, they committed to take it to 100:1!

Tough Love: What are you doing this month to restore your unprofitable customers to break even or better?
Hint: A good retention strategy is about helping you AND them make subtle shifts in behaviors, not about firing them.

  1. Discover Your REAL Value Proposition When You Regain Lost Customers

This is an Achilles heel for almost every organization’s retention strategy – dreading to ask a lost customer to come back because you’re afraid of what you’re going to hear, or not having a good answer when you hear their stock excuse that it was “price” (which is rarely the true cause).

One of the benefits of improved customer loyalty and retention efforts is finding out why they really left, which can have a significant impact on overall customer attraction and retention. Fix any self-inflicted wounds on your end that may have been the cause and give them a heartfelt offer to come back and do business with you again. Along the way, you’ll find out how to stop churn AND what your long-term customers really value about doing business with you – your REAL value proposition. When one of my clients went through this process, they not only retained 50% of the customers that had left, but their revised value proposition improved their sales prospect conversion rate from 1 in 100 to 1 in 3!

Tough Love: What are you doing this month to regain lost customers?
Hint: You need to get over those fears and simply reach out, because often the grass didn’t turn out to be greener on the other side, and they may be embarrassed to come back to YOU! So make it easy for them to save face and return.

  1. Stop Unnecessary Profit Leaks When You Reactivate Your Inactive Customers

Do you have people in your database that you never hear from and you wonder “are they dead or just sleeping?” When it comes to a great retention strategy, this is my personal Achilles heel. I’ve spoken to thousands of business executives all over North America, and I know that my expertise could have a significant impact on the profitability of their business. So a new part of my business practice is to reach out personally to those leaders to serve in whatever way makes sense – with a free resource, with consulting services, or with my 1-year online profitability program, ProfitU.

When I worked on the Reactivate part of our retention strategy with a large educational organization, they found that well over a million dollars in printed catalogs were never making it to their customers’ desks – totally wasted marketing costs! They only found that out when they picked up the phone, asked if those former customers still wanted to hear from them, and repeatedly heard “we never hear from you anymore!” It turns out all those catalogues kept getting stuck in the mailroom because they were being shipped on a pallet.

Tough Love: What are you doing this month to reactivate your inactive customers?
Hint: Having a retention strategy means it’s not up to them to remember us… it’s up to us to remember them.

The first step to improved customer loyalty and retention is to activate your 5Rs of proactive customer profitability management. If you’d like to hear more about any of the success stories I’ve shared here so that you can help inspire your team, email me at

Which of the Rs were YOUR highest priority this month?

#1 Bestselling Author, International Speaker, and Accelerator Anne C. Graham is on a mission to help 5 million business leaders and their teams double their profit per employee – or more – in less than one year, in less time per week than they’re spending on email per day. Her new book Profit in Plain Sight includes the 5-step proactive P.R.O.F.I+T Plan to do it.  Connect with Anne on Twitter, LinkedIn and Facebook.