Did you know that retaining customers is often much cheaper than acquiring new ones? The cost of attracting a new customer can be up to 5x higher than keeping an existing one. And even after all that outlay, the value of a new customer is much less than established ones. Due to the trust built between a brand and its customers, businesses can successfully upsell or cross-sell to their existing customers more easily than with a new client.
One important way businesses retain their customers is through knowledge management (KM).
But what is knowledge management and how do businesses execute it within their organization? Read on and learn how improved knowledge management can help your business with customer retention.
Knowledge Management 101
First of all, what is knowledge? Knowledge is facts, information, and skills learned from experience or education.
Knowledge management is the comprehensive process of curating, establishing, and dispensing content across an organization. KM provides the operational and communicative foundation for gathering this valuable knowledge into a central, usable repository.
Consider KM as a way of thinking about the framework, tooling, and activities required for creating, sharing, updating, and managing your organization’s knowledge and data.
But KM must have a system – a knowledge management system.
With a KM system, businesses can streamline their processes successfully. Businesses could provide their customers with a centralized knowledge base that delivers accurate and relevant information, thereby enabling them to fix problems or answer questions on their own without having to resort to the customer hotline or waiting for a live agent.
An online knowledge base or central information repository gives users the opportunity to retrieve data instantaneously, anytime, anyplace, and from any device.
The Power of Knowledge Management
Having a knowledge management system for customers is a powerful asset for any business or organization. Here are some of the reasons why:
- It provides another channel for customer support
- It empowers customers to solve issues on their own instead of relying on the hotline or chat support
- It frees up customer service personnel to work on more serious problems that cannot be solved by the knowledge base
- It improves customer satisfaction by allowing them to search for answers to their questions easily and conveniently.
But how would the powerful effects of a knowledge management system benefit you and your business?
How a Knowledge Management System Helps Customer Retention
When your employees have immediate answers to a customer’s question because they have a ready and available resource to reference, everybody wins. The customer gets the information they’re looking for in a timely manner, and your staff doesn’t waste time clicking through page after page of unorganized data.
When your customers have an available resource to reference for themselves, your employees will be free to help other customers with more complicated and complex matters.
Having a knowledge management system helps with customer retention in five ways:
It generates customer lifetime value.
A satisfied customer will always stay with your company if their needs are consistently addressed by having access to a full-fledged knowledge base.
It reduces buyer’s remorse.
Businesses have the challenging task of reducing the number of bounce rates and abandoned carts they have caused by buyer’s remorse. A post-sales strategy is a key to ensuring customers that they made the right decision, and an effective customer support knowledge base is the way to do it.
You can analyze your customer’s search patterns, and the keywords they’re using to get the information they’re looking for. Use that data to include relevant content in your knowledge base to guarantee your customers have the answers they need when they need them. Regular customers become regular customers after first being one-time, satisfied customers.
It produces a fail-proof follow-up strategy.
Communication with your customers after their purchase can determine your chances of retaining them. Simple things like a “thank you” card, exclusive offers, or special deals via email is often part of this post-sales strategy. But the strategic moves that are the most effective are timely and personalized. Make your customers feel valued by showing them respect and addressing them as individuals rather than just customers.
Your knowledge base will have information about your customers’ previous transactions and wish lists. Leverage this data to show them your appreciation for doing business with you, and to pitch a personalized offer they can’t turn down.
It re-acquires past customers
As previously mentioned, bringing back customers who have already done business with you is much easier than acquiring new customers. Inactive buyers are easier to reacquire.
Businesses can reach out and try to persuade these customers to come back after referring to their internal knowledge base containing customer data and feedback. A knowledge base is the answer to retrieving valuable data that can assist you in rebuilding that relationship. Understand what happened, and why they didn’t come back, and you’ll know what to do differently the second time around.
It delivers exceptional customer service.
Customer service is vital to retaining customers, and a knowledge base is the heart of your resources to execute that. Your employees can instantly address customer complaints with accurate and up-to-date information. Quick solutions provided in real-time will be the result of their efficiency, agility, and productiveness. This will increase customer satisfaction.
It’s important to leverage knowledge for further improvement. Improving knowledge management is a key factor for customer retention. So, why wait? Implement a knowledge management system now and watch your profits soar – not from new customers – but from returning customers who are sure to consider you a friend.