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Customer loyalty

Businesses spend much of their time trying to bring new customers on board. So much time, in fact, that many forget about their easiest and most valuable source of revenue: repeat customers. Yet the essential truth is that customers who stay for longer spend more.

How valuable is this insight? In fact, Bain & Company, working with Harvard Business School, found that increasing customer retention rates by 5 percent increases profits by 25 to 95 percent. And the Journal of Marketing has reported that a referred customer is 18 percent more loyal than a customer acquired through a different method.

Other benefits of retaining customers for longer include:

It’s easier to sell to an existing customer than a new prospect.
You’ve got data on past purchases to inform future strategy.
Loyal customers are more likely to recommend your company.

Delivering experiences that make your customers feel valued and appreciated is a great way to gain repeat, loyal customers. Here are a few ideas for increasing retention:

Improve the overall customer experience by focusing on critical touch points.
Find ways to express your gratitude.
Reward loyalty by offering customer-only deals, special invitations to preview new products, anniversary offers and more.
Make it more difficult to leave (e.g. offer to store customer data or equipment).
Change your subscription model.
Be overly generous every now and then, offering big discounts on small-ticket items to appear more price-competitive.
Run a campaign to bring back ‘lost sheep’ (dormant customers are often quite open to trying your company again).
Under-promise and over-deliver (e.g. state a standard delivery time of 48 hours but aim to consistently deliver next-day).
Systematically ‘over-react’ on complaints to turn doubting customers into even more loyal ones.
Spend more time with customers (ask if you can conduct a personal interview to understand more about their needs).
Build KPIs around customer service and link them to service staff bonuses.
Introduce a VIP system to make key customers feel more special (for best results, make sure there are multiple levels).
Surprise your customers (if you’ve sold a laser printer, send a free toner cartridge refill after a few months with a personal note saying “just in case you’re running out!”).

Lessons in hindsight: reputation management, not issues management

06/29/2017

Author: Angie Greving
From: Bader Rutter

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