Customer Retention Marketing

In competitive business world and challenging economy, customer retention is a significant component of your success. The idea of a business is not only to generate, but also to keep a customer.

A business will only make profit while continuing to survive if it is able to successfully create and retain customers in a cost effective way. When a business fails to adopt robust customer retention marketing, it will experience losses and that may lead to the demise of the enterprise. In maintaining a profitable business, customer retention and customer retention marketing are the two key components.

If you do not give some good reasons to your customer to stay, your competitors will give them a reason to leave.

The profitability of a business depends on customer retention and satisfaction. Keeping your current customer or client is much easier and far less expensive than it is to get your new customers or clients.

Industrial surveys across the world confirm that keeping one existing customer is about five times more profitable than attracting one new one. To get a new customer, you have to convince someone who doesn’t know you, your business. He or she has no particular cause to trust you. Then why they will take a chance on you?

So, winning a new customer is literally a struggle. Normally, a person will have to see or hear your message for a number of times before even considering you.

But with an existing customer, you have already done the hardest part successfully of winning your customer’s trust and confidence. At this point, you need a good customer retention strategy.

Customers will need some sort of encouragement to stay with you. You need to build a good rapport with your customer, make them feel special and valued.

Customer retention marketing

The aim of customer retention marketing is to convert first time or occasional buyers to loyal, long term customers. Loyal customers will return to you without even considering alternatives.

Of course loyalty also has a lot to do with your company’s continuous delivery of superior value. The business must first satisfy the customer repeatedly to win customer loyalty.

Customer loyalty plays a major role in sustaining profit growth. For business, customer retention marketing is more than just an important consideration. It is the difference between loyalty and defection. Having, the most up- to-date and useful information on customer retention marketing is a necessity today.

It is easy to sell something to anybody once but the trick is to do it again and again. Top companies are able to create successful customer retention marketing plans and execute them accordingly. The general rule is to study customer behavior and formulate your customer retention marketing strategies accordingly.

Here are some key principles -

1 . Future customer behavior can be judged by past and current customer behavior. In general, this concept really works when it comes to action-oriented activities like making purchases and visiting web sites, etc. The concept takes into consideration the actual behavior and not implied behavior.

2. Customers will return to you if they are happy customers. Marketers can take advantage of this behavior by offering promotions of various types. Active consumers like to feel good. Promotion can be of different types starting from discounts and sweepstakes to loyalty programs and higher concept approaches such as thank-you notes and birthday cards.  Promotions influence behavior. 

If you want your customers to stay with you, you have to do something for them. Customer retention means keeping your customers active with you.  If you don't, you might lose them and ultimately they will no longer be your customers. 

Promotions encourage interaction of customers with your company, even if you are just sending out a newsletter or birthday card. It is true that eventually almost all customers will leave you, but the trick is to keep them happy and active as long as you can and to make money in the process.

3. Customer retention marketing is all about:

Action – Reaction – Feedback – Repeat. 

Marketing with customer data is a valuable conversation between the marketer and the customer. You should listen to what the customer has to say.

Let’s take an example of some average customer behavior. Calculate the number of days between the first and the second purchases of every customer who has made at least two purchases. Suppose you find it to be 30 days. Now see your one time buyers. If a customer does not make second purchase within 30 days after the first purchase, the customer is not acting like an average customer. With the available customer data you can very easily detect that something is wrong. You should react by organizing a promotion. This is a good example of how data can speak for the customer.

4. Customer retention marketing necessitates allocating marketing resources.   You have to recognize some marketing activities and customers that will generate higher profits than others.

One way to shrink your budget is to steadily allocate more of your budget to more profitable activities and reduce the amount allocated for lower profit heads. When you have a choice, instead of spending the same amount of money on every customer, you spend more on some and less on others.

Customer retention marketing is all about developing a method to allocate resources to the most profitable promotions and deliver them to the right customer at the right time. Customer data created through meaningful interactions helps to reach the prospective customers and saves lot of time and money to go waste on unprofitable promotions and customers.

All business profits are ultimately earned from conducting successful relationships with customers. As the source of all your profits, customer retention policy should be valued and protected.

Customer retention can be improved by explaining to your employees, especially those on the front line who deal directly with your customers, just how much each customer is worth to your business. Customer retention plans helps to keep existing customers content and new customers coming back for more.

Developing a Customer Retention Strategy is one way to maintain high customer satisfaction levels and protect customer relationships because satisfied customers are the most valuable assets for the company.

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