Why Retain Customers?
If ever there was a “no-brainer” blog, it would be about customer retention. Who doesn’t want to retain customers? They are our best source of revenue, they are our advocates, they pay the bills, and they enable growth. Conventional wisdom indicates that it’s 5X more expensive to attract a new customer than to retain an existing one, although many companies are shifting from looking at transactional costs to the value of a customer over their lifetime. The secret to retaining customers is to make sure that you consider your customer base when you create and execute your marketing programs, and that you make their experiences with your company memorable (in a good way).
How Does Marketing Lose Customers?
There are really only two reasons why we lose customers –– We either neglect or irritate them. The secret to lost customers is that they are never really lost — it just takes extraordinary effort to get them back.
Lost Customer Causes and Remediation
|Neglect||Infrequent Contact||Adjust frequency using marketing automation tools and CRM||Fairly easy|
|Irritation||Too frequent contact||Adjust frequency using marketing automation tools and CRM||Fairly easy|
|Neglect||The competition communicates more effectively||Benchmark and improve||Moderate: Balance your resources against objectives and priorities.|
|Irritation||Poor user experience (UX)||For tips to improve your marketing UX, see our recent blog post about UX design and marketing.||May be difficult|
Frequency of Communication
You have to communicate valuable information to your customers on a regular basis to establish trust and an expectation for your company’s outreach. They need to know about the great new product you just launched that will let them reduce processing time in their workflow. They have to know that they will increase sales of their product(s) because your new product enhancement enables a significant cost reduction. They also need to know you just received government approval on your product, so they can sell confidently into new markets without fear of regulatory challenges. As long as you have something useful to offer, THEY NEED TO KNOW — and they will eventually expect your communication, look forward to it, and trust it (and you).
“Just enough” is a fine line in communications frequency to customers, and the good news is that anti-spam laws actually help marketers by enabling receivers to self-select what and when they want to hear from you. Your marketing automation systems will keep track of communication frequency and opt-in status; the secret is keeping the system updated and your content relevant and engaging.
You Have to be Competitive
You have to be competitive with both your products and your marketing efforts. While it’s true that good marketing can sell a bad product and bad marketing can ruin a good product, let’s assume that you have a good product and can mount a decent marketing campaign. The next steps are to benchmark the competition and optimize your marketing efforts on a continuous basis. The secret is that marketing is dynamic — and “set it and forget it” only applies to washing machines and the “Easy-Bake Oven.”
The User Experience
The all-encompassing UX. It’s the catch-all phrase for customers’ perception of their experience with your brand, gleaned primarily from their interactions with your website, product, service, and your employees. The secret to optimizing your UX is collecting data. Survey your customers, objectively, and dispassionately review the website or hire a consultant to do the work for you. Reviews should be conducted on a periodic schedule (because marketing and external factors are dynamic).
There are specific customer retention strategies that you can deploy depending on your products, services, markets, and user expectations. In the B2C world, coupons and customer loyalty programs work well. In the B2B world, not so much. Individuals want recognition, while companies want to fulfill their mission statement while making a profit. Understand what motivates the industry you serve and craft your retention strategy accordingly.
If you need help developing a marketing strategy for customer retention, contact us for a 30- minute conversation.