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The Dynamic Customer: Retention and Referral

The Dynamic Customer: Retention and Referral

A client provides two valuable sources of income: Retention business, which we often call repeat business, meaning purchases that continue over time. Some of my corporate clients were with me for over a decade; and Referral business, wherein the client provides solicited or unsolicited introductions to additional buyers.

It’s pure folly to consider only one of these dynamics. That’s like leaving money on the table. But we often become so involved in an initial project (or so relieved to have landed it) that we ignore the real dividends of client acquisition.

As you can see in the graphic, clients that provide high retention business and high referral business are your dynamic customers. You want to move others into this position and secure those already in that capacity.

Clients in the upper right are a “flash in the pan,” in that they can provide a high rate of referrals but aren’t retained long enough to supply very many. Those in the bottom left are “wasted” because they are retained but aren’t a source of referrals. These are ideal candidates to move up to “dynamic.” Finally, some clients are both short-term and don’t provide referrals, and are purely transient, bottom right.

What are you doing to create the dynamic that can lower your costs of acquisition, provide evergreen business, and guarantee your business in any economy?

© Alan Weiss 2013

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Alan Weiss is a consultant, speaker, and author of over 60 books. His consulting firm, Summit Consulting Group, Inc., has attracted clients from over 500 leading organizations around the world.

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