What's More Important - Growth or Retention?

Loyalty and retention trumps growth 

By Joshua Hebert, Co-Founder and CEO, Magellan Jets

BOSTON--()--While most companies traditionally spend more money on customer acquisition because it can be viewed as a quick and effective way to increase revenue, customer retention is often faster and can cost up to seven times less than customer acquisition. Selling to customers with whom you already have a relationship is often a more effective way of growing revenue because companies don’t need to attract, educate, and convert new ones.

Since 2016, the total number of clients served by Magellan Jets has remained flat, based on our decision to pull back marketing efforts dramatically. We made a decision three years ago, which was risky and scary, to not concentrate on growth and concentrate instead on customer satisfaction and retention. As a result, our renewal rate on memberships is now 92%, and 3 out of five clients provide a qualified referral within 60 days of renewing their membership. To us, this proves that cultivating the kind of relationships that inspire members to renew and clients to reorder is more important than diverting attention to obtaining new business.

We came out of 2015 with rapid growth of 110%. In planning for 2016, the Magellan Jets’ leadership team sat down and planned on doing the same thing. We looked to see how that growth was attained, asked ourselves if we can control that type of growth and weighed the pros and cons. We also thought about how we were going to deal with our existing customers, whom we spent a lot of time and money to build meaningful relationships with Then we talked about customer retention and how to do that, we looked at the retention rate – it was only 60% at that time.

We took a step back and realized that, if we grew at 110%, the retention was only 60%, we were losing 40%. This meant that, for the foreseeable future, we needed to change our focus from growing new business to customer retention. We established a number of channels to gather feedback from customers in real time. In doing so, we discovered that often overlooked, early indicators of dissatisfaction were being missed. We established a data-driven quality assurance system, including case management, client account and vendor scorecards. Once we integrated the quality system with our safety management system, the results were astounding.

We took a technology-enabled, human-driven approach that focused on the simplicity of booking and a small number of other focused issues. Some customers wanted access to the CEO and President. One of the important parts of keeping customers happy is having the C-Suite all readily available to speak with customers for any reason, at any time.

Here are 6 customer engagement must-dos to maximize retention and turbo-charge growth:

  1. Set expectations. Set customer expectations early and a little lower than you can provide to eliminate uncertainty about the level of your service and ensure you always deliver on your promises.
  2. Become the trusted advisor. You need to be the expert in your particular field, so that you can gain customers’ trust and build customer loyalty.
  3. Build trust. Build relationships with customers in a way that fosters trust. Do this through shared values and fostering customer relationships based on things that are meaningful to the customer instead of mostly meaningful to the company.
  4. Take a proactive approach to service. Implement anticipatory service so that you can eliminate problems before they occur. Under promise, over deliver.
  5. Go the extra mile. Going above and beyond will build strong relationships with customers and build long-term loyalty by paying attention to their needs and preferences.
  6. Make it personal. Personalized service improves customer experience and is something customers are expecting and demanding. Make their experience personal to strengthen the bond with your brand.

The decision to build on our past success by investing in the customer experience and relationships is clearly paying off. Magellan Jets has broken records across most KPIs in Q1 2019 and Q2 is on-track to lead year-over-year performance and potentially break all-time records in revenue, growth, net profit and client satisfaction.

We are happy to share what we have learned with anyone in any client services sector where perfection is the expectation: We all know that an outstanding company culture, superior infrastructure, and great products and services are not enough – we have had all of the above attributes in place for years. If given the choice to invest in customer growth through marketing, discounts, and additional salespeople or spend the time and money to retain the customers you have – the loyalty earned and the referrals gained by taking care of the customers you have is the true platform for sustainable growth and success.

About Magellan Jets

Magellan Jets is a Boston-based private aviation solution provider built on a foundation of integrity, reliability, and trust. Founded in 2008, Magellan Jets’ innovative model offers jet-specific memberships and on-demand charter services designed to provide the freedom and exceptional personalized service that private travelers expect. Magellan Jets and its FAA-licensed Flight Support team ensure that every detail is tailored to exceed expectations. Safety, security, and an uncompromising focus on hospitality combine with the most exclusive network of aircraft in the skies to let travelers experience private aviation the way it was meant to be, purely private.

Contacts

Media:
Kelly O’Shea at KOPR
Kelly@KellyoPR.com
(917) 685-4515

Contacts

Media:
Kelly O’Shea at KOPR
Kelly@KellyoPR.com
(917) 685-4515