How did Customer Retention Management Work Before Email?
As
the holiday season approaches, most retailers try to break through the clutter
and try to grab a share of more than $1 trillion being spent by customers. What
many of these brands don’t understand is that much of their success in doing so
is based on customer retention management in the months leading up to holiday
season. Companies may differ in so many ways, but they have one thing in common
– they need loyal customers.
Retail
chains and tech startups have gone out of business due to a failure getting customers
to return, according to the Wall Street Journal. Close to 80 percent of
businesses fail within a year, as most lack customers. Repeat purchases are
essential. So, let’s trace the roots of customer retention programs before
modern innovations like electronic mail made their way to the scene.
- Early History of Customer Loyalty
Loyalty
programs emerged during the 18th century, when shop owners provided
consumers with copper tokens for applications to later purchases, like a
delayed discount program. Customer retention management really took off in the 19th century,
with stores shifting to stamps that would eventually become third party
programs offering a lot of merchandise. Consumers paid in full and freebies
were given away too.
The
next step was when stamp programs faded and loyalty strategies aimed to reward
customers for showing up on a repeated basis. By the second half of the 20th
century, American Airlines and other such brands established the essence of
retention management with frequent flier programs, which promised free flights
and better perks for those travelling.
Small
coffee shops soon had punch cards. Pharmacies, doughnut stores, hotels, auto
repair units and more even offered plastic keychain tags for promoting loyalty
programs. With the advent of email and other internet technologies, however,
smartphone apps replaced plastic cards.
- The Rise of Membership Programs
With
the advent of internet technologies, customer retention became even more
competitive. Rather than loyalty card programs, membership programs came into
place. Wholesale clubs like Costco, allowed members to shop and receive discounts
and special products. With deep
discounts came membership programs like the Dollar Shave Club. The members
received regular shipments of branded blades. The company was sold to Unilever
for USD 1 billion because of the success of its membership program.
Conclusion
Thus,
customer retention management made the switch from punch cards to personalised
communication, with the advent of emails. Retention management is now at the
core of any and every business and it brings a lot of opportunities for growth
along with it. Client retention management has also become more competitive
with the introduction of electronic mail and other internet technologies, which
have made it easier for customers to get information about brands and
alternatives.
Additionally,
electronic mail offers the chance to customise communication or even use
marketing automation solutions like MailChimp to bring about a change in the
way retention was managed. Marketing became more about valuing the customer and
one-to-one communication with the advent of email. With the evolution of
retention management from stamps to cards and eventually smartphone apps, one
thing has not changed – the most precious asset of any business remain its
customers!