The 5 Commandments Of Customer Retention
Customer retention is a topic that isn’t talked about nearly as often as it should be. There is a misapprehension that if your company doesn’t sell using a subscription-based model, then you likely don’t need to apply retention tactics. In a world where consumers are spoilt for choice and increasingly able to interact with and complain to companies online, retention is incredibly important.
The Goal of Retention
Retention is meant to make sure that customers remain loyal clients to you, maintaining or increasing their patronage of your services over time. In a world where customer acquisition costs are on the rise, retention is a great, cost-effective way to maintain and build your business.
There are simple principles at work to retain customers, but they are like chess: minutes to learn, a lifetime to master.
1. Treat customers like humans and talk to them that way
It’s an old standby for a reason: people who are successful at face-to-face selling will tell you that one-on-one human interactions sell products faster than any broadcast medium could. There is still something to be said for feeling like you’re visiting the local store for comfort and security. So make sure that when you’re communicating with your customers, you do it in a way that conveys this feeling. Treat everyone with respect – like a human who needs help that it’s your job to provide – even if that include a customer who has his or her guns blazing at you with complaints. This applies to people answering the phones as well as those who post on your social media channels.
2. Understand cadence
Cadence is the frequency by which you reach out to a customer. It has two sides to it: the speed at which you reply to customers who proactively reached out to you, and the frequency of times you proactively reach out to them. This number is different for each customer, but there are some guidelines you should follow: once a week for email is usually plenty. Monitor your email open rates for patterns. Monitor your social media reactions to understand how often your customers want to hear from you. Remember that context affects cadence. If you’re trying to win back a customer who hasn’t purchased in a while, it’s important to make the approach softer. Think: phoning a family member you haven’t seen in a while.
3. Solicit feedback – but follow through
How many times have companies solicited your opinion only for it to fall on deaf ears? How many times have you tried unsuccessfully to reach out to a company with the idea of bringing something to their attention so it can be changed? Your customers want to talk to you, but if you don’t solicit their feedback with a goal to affect change and follow through on their concerns, you might as well not be reachable. The market has changed and only responsive companies will survive in the new market. You need to build culture internally to see these comments as a positive step toward better customer satisfaction, implement changes quickly, and when complete, tell your customers what action you took. You will be amazed at the loyalty this will inspire.
4. Follow up after major events
If you notice that a customer who used to shop often with you has tapered off, there’s an opportunity to find out why. Similarly, if you notice someone has increased his or her frequency or order value with you, you should reach out to them, offering assistance and finding out what has changed for them. You may just find opportunities to help customers who will then spread their positive stories to others. Retention of these types of customers can lead to lower-cost acquisitions through positive word-of-mouth.
5. Inspire loyalty
There’s something uniquely frustrating about being a long-term client of a company only to find out that every fair-weather new customer is getting a better deal. Remember: customers are actively sharing promotions online and if you show you only care to incentivize the new customers, and not thank the old ones, you’re missing a golden opportunity to retain loyal, vocal customers. Consider a plan that is uniquely tailored to the individual and his or her shopping habits. The gesture and not the value of the incentive will be remembered and shared by those customers.
Retention is a great way to keep your client base happy, loyal, and actively recommending your company. Don’t discount the necessity of retaining clients. With the right cadence and an open attitude, you can increase the purchase frequency and value of customers who already like your product. Don’t be quick to discount those who haven’t purchased in a while. They could hold the keys to improving your product for your entire customer base.