Improving Your Customer Retention Management Rate
In a world obsessed with acquiring new customers, it’s easy to overlook the ones who have been there from the start. The loyal customers who have stood by your brand through thick and thin, the ones who have championed your products and services to their friends and family.
But what happens when you neglect these valuable customers in favour of shiny new ones? You risk losing their loyalty, their advocacy, and their business.
In this blog, we’ll explore the problem with rewarding new customers at the expense of existing ones. We’ll discuss the financial benefits of retaining existing customers, and we’ll share some tips for enhancing customer retention.
So if you’re looking to build a strong and lasting customer base, read on. Because the truth is, the best customers are the ones you already have.
Table of Contents
The Problem with Rewarding New Customers
While onboarding is important to acquire customers, it is the loyal customers that you want to reward in order to maintain their loyalty and advocacy. If you can encourage them to continue using your services through added benefits or exclusive benefits, this will strengthen the brand-customer relationship and potentially lead to valuable word-of-mouth referrals, further expanding your customer base and brand reputation.
However, forsaking your customer-based for shiny new ones can mean you end up gaining nothing.
For example, in 2019 Air New Zealand offered double status points to new customers who signed up for the airline’s frequent flyer programme (Airpoints). However, existing Airpoints members, many of whom had been loyal customers for years, were excluded from the promotion and felt that they were not being adequately rewarded for their loyalty.
While Air NZ’s intention may have been to boost its customer base and incentivise new travellers, the promotion had the unintended consequence of alienating existing loyal customers, and this impacted the customer-brand relationship.
The Financial Benefits of Retaining Existing Customers
Retaining existing customers is not only a wise business decision but also a cost-effective one.
Research has consistently shown that acquiring a new customer can cost anywhere between four to five times more than retaining a current one. Think about the resources and cost that goes into collecting new leads. Advertising, time spent cold-calling, or producing new marketing collateral – whether you have a long or a short sales process, this can all start to add up.
Existing customers, on the other hand, don’t cost nearly as much.
These customers, already acquainted with your brand, are more inclined to make repeat purchases. They are more trusting and familiar with your offerings, also serve as advocates for your brand.
Furthermore, the power of customer retention is key in fostering brand loyalty. Satisfied customers not only make repeated purchases but are also more forgiving of occasional missteps, often referring others to your business in the process.
Ways to Enhance Customer Retention:
Provide excellent customer service
This might sound basic, but it’s truly the foundation of any successful customer retention strategy. Customers who feel valued and appreciated are more likely to stay loyal to a brand. Make sure your customer service team is responsive, helpful, and goes the extra mile to resolve any issues.
Create a loyalty programme
Loyalty programmes are a great way to reward customers for their continued business. Offer points, exclusive access to valuable content, or other perks that encourage customers to keep coming back.
Personalise the customer experience
Take the time to get to know your customers and their needs on a business and individual level. It’s also helpful to understand how they operate. Offering psychometric testing, like the REACH ecosystem, in the onboarding stage will allow you to tailor your communications and offers to them more effectively.
Gather and act on customer feedback
Show customers that you value their opinion by regularly asking for feedback. Then, be sure to take action on the feedback you receive. This shows customers that you are listening to them and are committed to improving their experience.
Stay ahead of the competition
Keep an eye on what your competitors are doing and make sure you are offering a competitive product or service. If you can offer something that your competitors don’t, you will be more likely to attract and retain customers.
Customer Retention Management with Attain
At Attain, we see the value in thinking differently. As you move into 2024, it’s not about reinventing the wheel but thinking about customer retention management from a fresh perspective.
Your customers are evolving, and so should your strategies. As you’ve won them over in 2023, ensure you not only keep them but turn them into brand advocates by choosing to think and act differently.
Looking for guidance on how to think differently with your customer retention management strategies? Get in touch with us today!