The current times are the times of abundance.

An individual has multiple options to choose from, to do any subliminal task or make necessary purchases. Thus, when the potential customer is posed with an abundance of choices, it becomes difficult to hold the customer to you. That is exactly what customer retention is.

What is Customer Retention?

Definition: To put into technical definitions, customer retention is changing the acquired customers into loyal customers. Subsequently, increasing their lifetime value as a customer of your company.

Or you can say, the ‘regular customers‘ who would prefer you over any other similar company.

Company retention has been considered one of the crucial factors in recent years that substantially increases a company’s profit margins. The growth is often touted to be somewhere between 20%-30%.

Moreover, customer retention is more accessible and cheaper in comparison to customer acquisition.

When the tough part of customer acquisition (bringing in new customers for the company) is achieved, customer retention is the logical next step.

Why is Customer Retention Necessary?

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Customer retention helps in more ways than one.

Some of the immediate benefits that come with customer retention are:

  • The current loyal customers act as your brand ambassadors. Positive word of mouth is one of the best marketing cues that would help you acquire many more new customers.
  • There are statistics that prove that loyal customers tend to spend more than the average customer who is up for a one-time purchase. Thus, increasing your profits.
  • Also as said before, with increased profits the process also claims little investment in comparison to other ways of profit maximization.

Customer Retention Strategies

Customer retention, however, also needs to be appropriately planned, keeping in mind what the company stands for and its goals.

Retaining, however, might seem a lot easier; you need to be wise and strategic while planning it out.

Thus, here are some of the strategies that you can use to scale your customer retention.

Customer retention strategies primarily revolve around basic principles of understanding consumer behavior. But your strength is in channelizing that into legitimate and viable actions for the customer.

1. Create a Brand Personality

Source: Medium

For customers to continuously be associated with your brand, there needs to be a value that they also need to feel.

When there is a brand personality, there will be ways in which the customer is intrigued to know more about the brand. That will help them be curious and excited about your product.

At the same time, they would feel a sense of fulfillment in investing in something more than just a product.

Products or services that have a stance for themselves are consistently found to fend for themselves better.

The best example in the Indian market could be seen in food delivery applications like Zomato, which has created a brand personality of its own. A personality that resonates with the young adult population of the country (who are also their primary targets).

2. Two-Way Relationship

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The relationship that your brand’s personality will bring you is not limited to the customer being the passive receiver of your communication. The communication needs to be two-way, where the customer is seen, heard, and feels understood.

When the communication is strong, and you understand the customer’s behavior, you can easily predict their behavior during a specific period, say a sale.

Customers tend to expect immediate appeasement to their needs. Especially in the current times, customers would prefer brands that would keep help and support easy for the customer.

When the customer feels valued, through immediate responses, there are higher chances that they stay. They also spread the word to their friends and family.

This is also one reason why Amazon has a strong foothold in their customer base, given they have a wide and effective customer support team.

3. Surprises and Benefits

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It is necessary that your loyal customers also feel special. The customer needs to understand the difference and the advantages of being routed to your company.

However, it shouldn’t be packaged as the company becoming the bigger person but as them rightfully receiving what they deserve.

Rewards (that benefit the customers’ future purchases or in general) need to make them feel delighted and also, valuable. This would make your customer come back, thinking that they might be surprised yet again.

This is one of the reasons why surprise cash-backs and coupon codes often make people come back to certain stores.

Sometimes these rewards could also serve as thank you notes and little gestures of emotional value that might impress the customer.

4. Collect Feedback and Improve

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The best person who can give you constructive feedback is the customer themselves.

Customer surveys always help and it is necessary that these surveys are taken seriously. Customer feedback helps the customer and also generally gives tips over which you can work.

It is necessary that once the feedback is given, the company works on it.

Also, make sure they let the customer know that there has been an improvement.

Surveys should also be done at regular intervals. The changing mood of the customer base will help you plan incentives.

5. Engage the Customer

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When we talk about surprises and rewards, they always need not be static. There could be dynamic rewards as well, that involve actions from the customers.

Have you seen those applications where one can play games to win reward points that could be used for purchases?

Those are dynamic offers that give the customer constant work and also give them a sense of accomplishment.

Engaging the customer becomes necessary when you want to make them feel involved in the company or the product.

Engaging the customer becomes necessary when you want to make them feel involved in the company or the product.

6. Value Addition

Value addition is another aspect of customer retention and could be anything that you are offering.

It could be the sense of relief that they are shopping from or using a brand that’s only good, but sustainable. Or, they are related to a company that is environmentally conscious. Validation is also directly related to the brand’s personality that you build.

Value addition tends to make the customers believe that they are doing their part for a better society.

One recent example is how Mamaearth promises to plant a sapling every time someone buys from them.

Image Source: Mama Earth

These kinds of incentives and value addition to the life of the customer motivate them to keep buying from the company.

7. Personalization

Source: Pinterest

Finally, we come to the most crucial strategy for customer retention: personalization.

We all know that presently, everyone wants customization and personalized solutions for their needs. That is one of the reasons Spotify Wrapped is always exciting and turned out to be so successful over the last few years. The algorithms help surprise the consumer and also make them feel valued for their choices.

Image Source: Spotify

Personalization of products and services makes the customer feel easy to go about making decisions in their lives. It also brings in a degree of comfortability in purchasing.

However, you need to hire data analysts and managers who would help you decipher information to appease your customers.

These are some of the customer retention strategies that you could use for your brand. Though, these aren’t the only ones.

Another strategy is to always involve and create excitement around your new products. This will make the customer also feel the excitement and feels closer to the new product.

Another important way in which you can retain customers is by educating them about your product. You need to explain things to the customer in detail as this makes it easier for them to start getting accommodated to your product or service.

According to a report in Salesforce, 79% of customers were willing to share relevant data that could help their needs and requirements be understood.

Thus, there is of course a demand from customers to have quality service so that they need not keep juggling between different companies.

Now, it’s your time to strategize and execute!

Also, please let us know some of the customer retention strategies that you use for your brand, in the comments below!

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