Why You Can Take Customer-Centric Retention Strategies to the Bank
Somewhere, there may be that one fortunate online merchant who doesn’t have to work tirelessly at retaining customers, who finds all of their customers willing and eager to keep coming back and back again of their own accord to fill the company’s coffers.
However, that would sure be a rarity. In real life, an exceptional rate of customer retention – the bedrock of both current ROI and long-term business success – is always the product of a customer-centric focus coupled with a range of thoughtfully designed and conscientiously implemented strategies.
That may be a principle that most online marketers can endorse in this day and age in which ecommerce consumers – armed with high expectations and virtually unlimited options in selecting a merchant – are calling the shots. Surprisingly, though, a large majority of companies are still focusing their efforts, and their budgets, on acquiring new customers rather than on giving their existing customers the attention and care they deserve. And they are doing that despite the fact that bringing in a new customer costs far more than hanging on to the one the business already has, and will generate less revenue as well.
Customer retention by the numbers
In one sense, it’s understandable that marketing budgets would skew heavily toward acquisition and shortchange retention strategies. Every business really does need to attract new customers day in and day out, after all, and their success in doing so certainly will have a lot to do with their long-term success.
Just not as much as their success in retaining customers once they have come into the fold. One clear measure of that came in an eye-opening report by Bain & Co. that has influenced a generation of marketers, and continues to do so. On the conservative end of the study, the authors calculated that only a five percent increase in a company’s retention rate could boost profits by 25 percent. In the upper range, they concluded that the same retention rate could yield a remarkable 95 percent increase in profits.
Even currently inactive customers can be fruitful prospects for customer retention efforts, because they are both easy to identify and easy to reach with tailored messages.
Successful retention strategies keep the focus on the customer
While customer retention strategies vary widely – from the tried and true methods that apply to any business to industry-specific approaches – one thing remains constant. The ones that deliver are built on an understanding of the customer’s interests, experiences, and expectations. On putting the customer at the center of the business, that is, and not merely as a slogan. In real terms and at every touchpoint on the customer journey.
Yet even with the best of intentions, staying focused on such customer-centric practices can be elusive. It’s all too easy to slip into a frame of reference that generating loyalty is simply a matter of making a consumer loyal to a company. That may be the business’s view, but the customer is almost certainly looking at the relationship through a different lens and seeing loyalty as a two-way street, expecting as much as they give.
Regardless of the customer retention strategy in use, it needs to embrace the customer’s perspective if it is going to build the emotional connection that underlies a continuing commitment to a brand. That mindset, coupled with the cutting-edge CRM and analytics solutions available today, can put the customer front and center every step of the way. That gives companies an opportunity to build a foundation for a rewarding relationship by demonstrating their own loyalty to their customers.
What customer-centric retention strategies look like
The same sophisticated technology that allows organizations to track, analyze, and optimize the customer journey allows marketers to deliver a personalized experience to an unparalleled degree, and that extends to retention strategies from targeted emails to rewards and special offers.
When the customer’s interests, motivations, and emotions are known, it becomes possible to reach out to them in meaningful and productive ways. That’s true when the contact is centered on sending a birthday greeting or a loyalty reward. But it is also on target when responding to a complaint, ironically one of the best opportunities to increase loyalty and trust.
In fact, all contact is good contact, when it comes to customer retention, as long as the company shows itself to be responsive and concerned with the customer as an individual. Whether it takes the form of a blog post, an email, a social media interchange, a newsletter, or a personal thank you email or gift following a purchase (or fielding that complaint, of course), each contact can be one that tells the customer that she is valued and appreciated.
In the final analysis, that’s the message that leads to customer retention.