Why There are no Shortcuts to Proper Customer Retention in 2019!

There’s a business saying that it costs five times more to acquire a customer rather than retain an existing one. The reality is there are a number of complicating factors, but in general, it costs more to bring customers in, rather than keep them, and combined with the classic Pareto principle, it explains the value of customer retention.

With 80% of sales coming from 20% of the customers, a simple game plan for profits should definitely incorporate retention. But what research often does not tell you is that retaining customers is harder than it looks. Customer loyalty is all about engagement. This, in turn, requires communicating constant relevant value. People only appreciate products with great benefits when you take the trouble of appreciating and valuing them.
  • Winning Mindshare or Wallet-share?
The reason retention is so tough can be put down to the difficulties of attaining both mind and wallet share. Typical customers see more than 10K marketing messages in a single day. Many of these ask for something or the other. Brands need to realise that retention requires a level of commitment that is way more than acquisition. It is the difference between lifetime value of customers versus a one-time purchase. Loyal customers in a connected environment are definitely harder to retain. Dying brand loyalty and a competitive market in the modern digital age means customers can always find brands to deliver the same quality faster and at cheaper rates. Research has also found switching costs are low.
  • Rising Customer Expectations
Consumer expectations are also rapidly rising and meeting these high standards is essential for business. Failureleads to decline in customer retention or client satisfaction or both. Businesses even adopt CRM tools to keep customers in the loop and know how to improve their product or service. Now, it’s no longer about three-brand lifestyles. Customers now shop based on quality, speed, price, and overall customer experience.

Close to 89 percent of businesses in 2017 competed primarily on customer experience in one survey.  Further, research by LivePerson found 71 per cent of online customers expect help within 5 minutes. Additionally, Google research unearthed how 52 per cent of customers were likely to leave a retailer based on poor mobile experience. Zendesk even found 95 per cent of unhappy clients share experiences with others! The numbers clearly point to how difficult and complicated retention is.
  • The Importance of Personalisation
Personalised marketing is the need of the hour. This is because personalised content and marketing messages are a great competitive differentiator. Brands that personalise customer experiences are seen as exceptional. Close to 50 percent of Millennial customers rank personalisation as important.

But personalisation of customer journeys requires considerable skill and knowledge. This is why client retention has no shortcuts. For example, emails with personalised tags in email lines and bodies increase open rates and raise CTR by over 6x times. But writing a bespoke email communication requires understanding how to click with customers and what makes a brand tick.
  • Complexities of Loyalty Programs
In today’s changing and evolving marketplace, deals and discounts are simply not enough. To build customer retention, your loyalty program, like your marketing message, needs to be customised. Keeping these factors in mind, hiring the right client retention firm can make a big difference to your profits and your ROI. So, hire a leading agency and set yourself apart as a business that wins hearts, minds and market share.


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