Make Customers Come Back - Winning Customer Retention Strategies
Customer Retention marketing is a tactically-driven strategy to
keep relationships with customers going and increase customer
interest. This strategy relies on the study of customer
behavior. Here are the basic tenets of a marketer that seeks to
increase customer retention:
1. Past and Current customer behavior
This is the best predictor of how customers will behave in the
future. They are the characteristics marketers should most often
look at. Analyzing customer tendencies and trends allows the
marketer to anticipate, if not predict, the customers reaction
to different situations. The marketer must take note that
behavior is action oriented, not a description. For example,
being a 35-year-old woman is not a behavior; it's a demographic
characteristic.
For example if you know from history that customer A is likely
to make a purchase if presented with a discount promotion, then
you might want to change your marketing tactics to include
promotional selling when approaching this customer. A great deal
of observation is needed if you desire to predict your
customers' behavior. This involves a great deal of notetaking as
well as watching what reaction the customer has to different
situations.
2. Active customers are happy customers
Happy customers are retained customers. If your keep your
customers involved, they develop a sense of contentment from the
fact that they are in control. Marketers will take advantage of
this by offering promotions that allow these customers to
exercise this feeling of control. The most common means of
achieving this kind of relationship with your customers is to
offer promotions such as discount cards, discounts, sweepstakes,
coupons, and customer points that can be converted to prizes.
Remember, if the marketing is not active, then the customer is
not active as well. And as we said earlier, active customers are
happy customers. Inactive customers on the other hand are lost
customers. So activity on the part of the marketer is very
important. Customer retention relies heavily on satisfying your
customers.
3. Customer Retention depends on:
- Action - Reaction - Feedback - Iterate
This is a cycle that the marketer should perpetuate. If the
marketer fails to continue this cycle, more or less, they will
start losing the customer. This process makes for a constant
improvement in customer relationship and in marketing power. It
also optimizes the marketers' strategy toward the customer.
Remember that not all customers are alike, so adapting your
strategy to fit the unique types of customers is vital in
improving customer retention.
- Listen - It's funny, but it's not the marketer who does all
the talking. If you expect to have your customers to listen to
you, you must also learn to listen to them. Remember that
marketers are trying to present products or services that the
customer desires. The marketer will never learn the right
approach towards addressing these desires unless he listens to
his customer.
- React - Watch for the customer's reaction to different
situations and note them down. If the customer shows favorable
reaction to a particular type of pitch talk, try that approach
again next time. If the customer shows a negative reaction to,
let's say, too much talking by the marketer, the marketer should
take note of this.
- Feedback - Knowing what goes on in the mind of your customer
is very important. Usually they will be glad to have their
thoughts regarding your service known. The marketer may receive
this feedback through suggestion forms, interviews, and other
methods.
4. Allocating Marketing Resources
Customer retention is not free! You should consider customer
retention as a major activity. And all major activities require
resources. If customer retention is not given proper attention,
it will fail. Customer retention needs resources to be
effective.
You should not be afraid of its costs because customer retention
pays its own dividends. Remember that is easier to keep a
customer than to win new ones. And that it is easier to lose one
than to gain one. Lost customers will probably never come back.
And to top that, they spread negative publicity about you. On
the other hand, customers that are happy attract more customers
to your service or product. Customer retention, therefore,
should be an integral part of any business plan.