Customer retention strategies are the processes and activities that companies undertake to retain as many customers as possible. In our last blog post we explored the Benefits of Customer Retention and learned that this is a worthwhile strategy that can increase a company’s profitability. In fact, Bain and Company have found that ‘a 5% increase in customer retention can increase a company’s profitability by 75%’. Now we know why customer retention strategies are beneficial, what are they?
Spotting changes in purchase patterns
Create a list of your top customers and their purchase patterns over the past 6-12 months. Are any of the purchase patterns declining? Do you know why this is? Is it just because it is a quiet time for this customer or because they are switching to one of your competitors? By spotting this early you can contact the customer and see what can be done to prevent them from leaving your company.
Excellent customer service
To gain customer loyalty you need outstanding customer service to keep them coming back. To accomplish this, you need to know your customers. Take time to talk to your customers, if they feel rushed or ignored this will create a negative experience.
Research has found that ‘80% of consumers are more likely to do business with a company if it offers a personalised experience’. By getting to know your customers through excellent customer service and reviewing their purchase history, you can personalise the marketing materials and offers they receive. By sending them appealing offers that are relevant, they are more likely to continually engage with your company.
Educate your customers
Educating your customers through your website, social media channels and blog on your areas of expertise will show them you care. Taking the time to provide this value-added service will lead to gaining customer trust and loyalty.
Reward profitable customers
This can be achieved in a number of ways. Primarily giving loyal customers a head start. For example, giving them access to services or products before they are released to the wider market. Secondly, making ideal customers VIPs. It is natural for customers to want to achieve a ‘VIP’ or ‘gold’ status, a good way to implement this is having a natural ladder to climb eg: bronze, silver and gold. Finally, reward customers when they refer a new client or make a large purchase. Financially or not a reward will make them feel special and that you have personally recognised their engagement.
Respond to feedback
Asking for feedback of how you can improve your product or service and if feasible actually implementing this will make customers feel that they are valued and being listened to. This will ultimately make customers stick with your company as they have invested their time in providing feedback and consequently feel are part of the process of developing your product or service.
Quality over speed
Research has found that customers prefer to receive a high-quality service over the speed at which they receive it. Think about it, would you rather have a rushed reply that does not answer your whole query? Or a detailed answer delivered in a courteous, willing and helpful manner that fully answers your query? The answer is simple!
Share your values
What does your brand stand for? Communicate this with your customers, through your website, blog, email, social media, let them know what you value. Research has found that ‘of those consumers who said they had a strong relationship with a brand, 64% cited shared values as the primary reason’. For example, it may be that your brand has a passion for charitable work and donates a percentage of profits or employees time to fund projects.
Don’t underestimate the power of ‘thank you’
When was the last time you received a hand-written thank you note? Nowadays these can be a rarity which increases the delight and surprise when you receive them. This is a fantastic low-cost customer retention strategy which makes the customer feel special, that you care about them and appreciate their business.
If you have any questions about customer retention strategies please contact us.