Tuesday, 21 June 2011

Business retention.

TCTC have seen an increase in demand for training on telephone business retention.  Most typically this is where customers are considering cancelling their policy / subscription or taking their money elsewhere.

When faced with these situations it is essential to remain calm, not to appear annoyed or defensive and to treat the request with respect and professionalism.

When a customer is calling to cancel they are often focussed on that objective alone.  To be successful in retaining business we must first change the customer's mindset.

2 important tips for successful business retention:

- Plant the seed for retention in the mind of the customer very early in the conversation.

- Create a thought provoking reason for the customer to consider retaining their business.

The seed for retention
When responding to a request to cancel or terminate business we often make the mistake of fully explaining the cancelation procedure without even considering alternative options which may help the customer.

The customer of course has every right to terminate and your approach must not block this but simply outlining the cancellation process alone will result in an almost certain loss of business. 

Failure to make the customer aware of all the options open to them is a failure to deliver good customer service.

In most cases there are alternatives.  For this reason reference to options (or similar) in the early part of the call will help plant the idea of retention.

Take a look at the following 2 financial service examples and consider the differences in their approach:

Example 1
Customer - I am thinking of redeeming the funds in my ISA, can you tell me how I can do this please?

- Certainly, you can do this over the phone today or you can put this in writing.  Once we have your instructions it should take a maximum of 5 working days to have the funds sent to you.

Example 2
Customer - I would like to sell my ISA investment please.

- Yes of course, I can help you with that. I will take you through the redemption procedures and also explain some of the other options you have.

The key difference between these 2 examples is the effect on the mindset of the customer.  The first example answers the customer's question directly but almost invites them to proceed with the cancellation.  In the second example the advisor is equally helpful but crucially, opens the customer's mind to the idea that there are other options for consideration. 

Thought provoking reasons for retention.
We need to create a relevant, thought provoking reason for the customer to consider retaining business.

These reasons could include:
- The alternatives to full cancellation e.g. retaining part of your investment / policy
- An outline of the consequences of cancelling i.e. the "what if" scenario.
- An explanation of benefits which the customer will no longer enjoy.
- Highlighting additional benefits associated with a product / service which the customer may not have previously been aware of.

A common error at this stage is to use negative re-enforcements questions / phrases which make the customer feel pressured and therefore invite them to respond in a negative way. 
"Would you be interested in hearing more about other offers we have?

To successfully engage the customer in the mindset of retention we need to identify what is important to them and obtaining the reason for cancelation is the critical starting point.

To see how this works let's return to our ISA example:

Agent - May I ask the reason for wanting to sell your investment?

Customer - I am going to use part of the funds to assist with a house refurbishment.

Agent - ...You mentioned that you are intending to use part of the funds, were you aware that you do not have to sell the complete holding?  You have the option if you wish to withdraw part of your holding and leave the remaining invested in the fund...

Customer - No I was not aware of that and it may in fact be something to consider...

In this example the agent has not asked the customer if they would be interested in hearing about other options.  She has instead taken the lead and subtly provided the customer with a relevant reason to consider retaining part of their investment.

As a result the customer's mindset is now far more open to alternative ideas / suggestions on some form of retention.

For an example of how these retention principles worked successfully on an extended warranty for kitchen appliances read the following article: