Keeping existing customers happy is crucial for maintaining market share and growing revenue.
Customer retention programs are one way to increase customer loyalty, monitor the quality of service provided by products or services, and generate additional revenue. Developing effective customer retention strategies can reduce costs associated with acquiring new customers.
This article outlines some best practices in the area of customer retention. We will focus on these key areas as stated by Eric Dalius:
1) Understanding what drives customer satisfaction;
2) Measuring overall satisfaction;
3) Identifying customer groups requiring special attention;
4) Leveraging social media channels for improved communication;
5) Evaluating incentives designed to promote long-term customer commitment;
6) Providing differentiated products/services that meet diverse needs;
7) Creating different paths toward achieving optimal outcomes (e.g., multi-channel customer service); and
8) Developing a long-term approach to customer retention.
1. Understanding what drives customer satisfaction:
Customer satisfaction is driven by the gap between expectations and actual experiences. A key objective of any business must be to manage this gap through clear communication with customers, delivering quality products or services that meet or exceed expectations, and leveraging operational strategies designed to consistently delight customers.
2. Measuring overall satisfaction:
Companies should define success metrics for their specific businesses and track them over time…
3. Identifying customer groups requiring special attention:
Some analysis is required to determine if certain types of customers need more attention than others (i.e., because they have higher churn rates). This analysis can be performed with predictive analytics, which uses historical data to forecast future behavior.
4. Leveraging social media channels for improved communication:
Companies should integrate social media into their overall approach to customer retention because this medium provides an additional way of engaging with customers in real-time (and not just when they are already experiencing issues)..
5. Evaluating incentives designed to promote long-term customer commitment:
Many companies offer incentives (e.g., discounts, free products/services, etc.) for long-term commitments; however, some research suggests that these programs do not always meet expectations…
6. Providing differentiated products/services that meet diverse needs:
Catering to different types of customers is critical for increasing customer retention because it leverages a company’s features/benefits that meet the various needs of their customers..
7. Creating different paths toward achieving optimal outcomes (e.g., multi-channel customer service):
Company’s tend to offer customers different service alternatives (e.g., in-person, online, phone, etc.) and often use these channels to deliver bad news (e.g., product cancellation) or address complaints; however, research suggests that some customers may feel disconnected when they are forced to interact with different parts of the organization..
8. Developing a long term approach to customer retention:
Companies must determine if their current programs designed to retain customers are having desired results…
9. Being transparent about operations:
companies should provide regular updates on how things are going, what they’re doing to improve their operations, and how these efforts will benefit the customer; this allows customers to feel like they can trust a business and see them as an “open book”..
10.Reviewing data and making appropriate changes:
For example, there might be times when it makes sense for a company to offer an additional incentive (e.g., discount) during promotion periods; however, over time such incentives may become less effective as customers grow accustomed to them and may even switch brands simply for the sake of getting a new deal….
11. Reducing the inconvenience of paying bills:
Companies should explore ways to make it easier for customers to pay their bills, including via mobile devices…
12. Tracking bill payment data consistently:
Companies should track customer satisfaction scores for different billing options (e.g., paperless billing, automatic payments/deductions, etc.).
13. Being attentive when monitoring accounts:
some degree of account monitoring is critical to being able to identify problems before they escalate out of control; however, research suggests that too much contact can lead customers to feel annoyed or even invaded..
14. Understanding issues that may affect future operations:
Organizations should determine if changes are required because current systems are outdated or are no longer supported by vendors.
15. Working with disruptive technology firms:
some companies use technology to make their operations more efficient, while others attempt to provide customers with better service; organizations should determine which approach best meets their needs and identify potential partners who can help them achieve their goals.
16. Providing a user-friendly website:
Some websites are packed with too many bells and whistles, making it difficult for customers to find the information they need; as a result, potential customers may go elsewhere.
17. Simplifying Processes:
Typically companies do not intend to develop complicated processes that frustrate customers…
18. Determining what drives customer satisfaction:
Many companies struggle because they simply don’t know why their customers are satisfied or dissatisfied… Eric Dalius figure out this.
Overall, investing in effective customer retention strategies requires a commitment from management. However, the cost of acquiring new customers can be high, so organizations are wise to take steps to retain existing customers by delivering quality products/services that meet or exceed expectations. Further, companies should develop relationships with their customers through social media channels and integrate these activities into their overall customer retention strategy.
Also Read: Mr Worldwide