6 steps to a successful retention strategy
How to keep customers once you have them
Customers in any business aren’t free to come by – costs are involved to reach them, convert them and on-board them. Having invested in acquiring a customer, it shouldn’t stop there. In order to realise the return on your acquisition costs it’s paramount to focus as carefully on how you retain that customer.
It’s more cost-effective to nurture and grow existing customers’ spend, loyalty, brand association and value than it is to continually invest resources into finding and converting new customers. You want their wallet share to stay with you, and for them to feel you understand what they want from your product/service. Only by investing in retention can this be achieved.
6 steps to a successful retention strategy
| Step 1 | Business needs and objectives – retention should be guided by these |
| Step 2 | Who are we talking about – which customers, define and describe the audience? |
| Step 3 | What do we know about them – value, loyalty, behavioural patterns |
| Step 4 | What behaviour are we trying to change – who’s at risk, where is the value? |
| Step 5 | How can we effect that change – what levers do we have? |
| Step 6 | Comms matrix |
A retention plan should seek to involve the customer in a two-way dialogue, which will enable us to gather important information about them which we can then use to more precisely tailor the communication that we direct to them.
The first action is to define which customers are more likely to lapse. There are behavioural and attitudinal factors which will also impact on an individual’s propensity to lapse or remain such as for a gym or fitness centre:
- Cost and convenience
- Propensity to move from gym to gym at the end of any contract
- New Year´s resolution-itis
- Fashion status etc, etc.
- Short term goals and personal targets
Key outcomes:
- Take the customer along a journey which actively and deeply engages them with the organisation, and positively reinforces the brand.
- Ensure all communications progress the relationship, acknowledge the stage they are at and encourage them to deepen their involvement and commitment.
- Understand the customer’s needs and interests from the outset, then act on them.
- Recognise and reward desired behaviour and reinforce brand choice, at key Moment of Truth (or as we like to call it – MOT; when they change their behaviour positively based upon an improved opinion of the brand or product)
Retention strategies will:
- Invite two-way communication to uncover insights into that customer
- Be relevant to what customers want, need and expect from your brand
- Add value to their original purchase – extra must be seen clearly and be valued (i.e the extra is something they want that appeals)
- Create brand alignment – reinforcing you as their supplier of choice who understands what they need, want and expect and is in tune with change
- Reinforce your brand proposition in a way that resonates
- Deliver ROI – lifetime spend should not be underestimated.
The customer journey concept is always organic, and we should be working on continual refinement of the strategy to deliver the greatest benefit to the ongoing health of the brand in general and the efficacy of the recruitment budget in particular.
If we can retain more customers then we can be more selective about who we recruit which then will further improve the rate of churn – becoming a virtuous circle.
Ask us about customer retention – small changes can make a huge difference but knowing your insights is where we start.