Ask any marketer what percentage of their marketing budget is for loyalty marketing – and the answer may surprise you.
Many people see marketing as a means of acquiring new customers, not retaining existing ones. Ask yourself – are you focusing too heavily on finding new customers and overlooking the importance of keeping your existing customers happy? What percentage of your 2015 marketing budget is aimed at customer retention?
The Chartered Institute of Marketing define marketing as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably.” Note the bit about satisfying customer requirements.
The financial benefits of having strong customer retention strategies in place are for all to see. Consider these findings from Forbes. Just a five percent improvement in customer retention can increase your company’s profitability by 75%. Furthermore, a new customer can cost you five times the amount involved in retaining an existing one.
Here’s four great ways to increase the likelihood that you will retain your customers:
1. Understand why customers buy from you
Discovering why customers choose you enables you to focus on your areas of strength. This avoids the risk of attempting to become everything to everyone and subsequently moving away from what your customers actually value. Look no further than Tesco for an example of this. The Huffington Post go as far as saying “businesses and marketers that do not search for consumer insights, will not be able to connect or engage with prospects and won’t be able to motivate them to become customers.” In far too many instances, decisions are made without a consideration of customers’ needs.
2. Give your customers a say
It is imperative for companies to measure customer satisfaction rates on a regular basis. This enables your business to identify where corrective action can be taken before any customer grievances result in them switching to your competitors. It also reveals valuable information such as the company’s net promoter score, as well as identifying value drivers which can be used to tailor the product/service offering to meet customer needs. Inspiration always comes from insight. The surveys that we conduct on behalf of our clients always lead to the best ideas, and help us to find areas of focus.
3. Reward Loyal customers
Have you ever felt like just a number to a company despite being loyal to them for many years? For this reason it is crucial that you introduce rewards for loyal customers just as one of our clients, ACtronics, have done with their Purple Points for Parts campaign. Say thanks. Your customers will remember that you did.
4. Don’t stand still
It is vital that you keep improving your product/service offering. One glaring assumption that a lot of companies make is that ‘customers keep buying from us so that means our products already meet their needs’. Be careful about making assumptions like this. However if improvements are not made they will switch to competitive offerings when they introduce new developments.
It is clear that a strong customer retention strategy can significantly impact your growth. In a future article, we’ll dive into the subject deeper and talk about loyalty program objectives. There are an abundance of companies who proclaim that their customers are their number one priority. However due to the high levels of distrust in companies after the largest worldwide recession for nearly eighty years, many customers now dismiss it as ‘corporate spiel’. There is a need therefore to ‘walk the talk’ to prove the sincerity of such statements.
Ready to walk the talk? Contact KG Moore on 01206 646 006 or email email@example.com to find out how we can help you become closer to your customers, build relationships and ensure customers stay with you, increasing your profitability.