Everything You Need to Know About Customer Retention
There is a difference between ‘playing to win’ and ‘playing not to lose’; weather it’s participating in the football world cup or running a business. We keep working towards not losing our customers rather than focusing on winning their hearts, so they never leave us.
In a simple language, customer retention is trying to keep more customers for longer time duration. But today’s digital customer is more informed, connected and knowledgeable about the competing products and services. This has led to steady erosion in customer loyalty, as they ditch the brands that aren’t up to par. So accept the bitter truth that you are going to lose customers, no matter what. Here is some root cause analysis to identify reasons behind the ongoing exodus of customers.
What makes your customers leave?
1. Lack of Interaction: By interaction, I mean both human and digital interactions with the existing customers. A flyer, an email, or social media engagement is not as impactful as compared to a real-time conversation with your customers. In-person interactions are the only way you get to know their real problems and whether your service meets their requirements; if not, where is it lacking. Remember, a customer never explains the reason for leaving, he just leaves.
2. You promise more than you can deliver: If you can’t meet your commitments, don’t make them in the first place. Bad news travel fast. An aggravated customer will talk about his bad experience, and thanks to the digital world, the news will travel faster than light. Instead, under-promise and over- deliver. They will stay loyal their whole life. Domino’s said they will deliver in 30 minutes and when they don’t keep their promise they give it for free. It’s a great example of doing what you say you will do.
3. Faulty mission and vision: What’s the motto of your organization? If you believe in ‘Profits First’ instead of ‘Customers First’, you will have to face the music. Believe you me; customer success defines the brand’s success. So make such business decisions that are not only lucrative but also favorable to your existing customers.
Why is Customer Retention Vital to A business?
1. A returning customer is more likely to try new offers promoted by your brand or buy new products because they trust you more as compared to a new customer.
2. You need to spend more money and time to acquire new customers as compared to retaining current customers. The cost factor is vital to all businesses which makes customer retention crucial.
3. You will need a lot of time, maybe years to bring a new customer to the same level of profitability as a returning customer.
How to Retain Your Customers
1. Generate Customer advocacy: Give them beyond the price you quoted for the service and make fans for life! Ongoing support service is a good example here. Your customers know when you go the extra mile. In the modern era of instant connectivity and networking, word of mouth marketing is still the best way to promote products and services. All your satisfied customers become your brand advocates, and they promote your brand among their friend circles and communities for free.
2. Humanisation of business: Make a heartfelt gesture by sending a box of chocolates, coffee voucher or a handmade card on Christmas or Easter day. These non-promotional contacts will stick in your customers’ minds. They will speak volumes about it. Humanisation of business is a subtle way to incentivise customers in order to stop them from switching to other brands.
3. Listen to your customers: All your customers are on social media. Follow them on Twitter, befriend them on Facebook and connect with them via LinkedIn. It’s where they are talking about your brand. You get to see their real feedback on your products or services and about their needs in general. So go ahead and hop on social media and use that insight to predict customer behavior and act accordingly.
Customer retention is imperative in today’s competitive environment, as it is the most cost-effective business strategy. Contented customers evangelise your business and they keep returning for more services. Healthy and sincere loyalty efforts, stated above will surely prevent them from straying or switching to other brands. Patronising has surely become integral to corporate success.
About the Author- Sudha Thakur works as an SEO and Social Media specialist at RL360 and is based in the Isle of Man (British Isles). In her free time she writes about a variety of topics like Business Strategies for small businesses, Personal Finance, Offshore savings, Elder care etc.