More often than not, it isn’t your product that makes you popular with customers, it’s how you serve your customers, and how you cater to all of their needs. In the current global market where product options have surpassed the number of buyers, it is a loyal customer base that sails a company through. That said, it has now become imperative to build customer-centric organizations where every process starts and ends with the customer in mind.
Customer centricity further elevates to another principle – customer retention. It is crucial that an organization does anything and everything to retain its customers.
Let’s ponder upon some reasons why a customer might leave you:
- 68% leave because they are unhappy with the services they receive.
- 14% are unhappy with the products or services they receive.
- 9% decide to use a competitor’s products or services.
According to a study by Bain & Company with HBS, “…increasing customer retention rates by just 5% increases profits by 25% to 95%”.
In this article, let’s look at a few fundamentals that need attention in order to retain customers.
1. The product quality – do the groundwork right
It’s crucial to do the groundwork right – there’s no point chasing customer success if the product is not up to the mark. A company can succeed only with top-quality products or services. A product/service is the primary reason why the engagement between the customer and the company started in the first place.
Living up to the expectation of the customer is of utmost importance, as only then does the opportunity for further engagement opens up. Once the engagement begins, the next step is to make them happy, and eventually, make them loyal by providing exceptional services and support.
At 77%, a great product is the most important customer driver of brand loyalty, followed closely by brand recognition and trust at 69%, according to BusinessWire.
According to an LIM College study of shopping trends, the respondents (age group: 18-25), responded with the following when asked, “What should brands do to remain a relevant choice for millennials or Generation Y?”
- Develop innovative new products and services (80%).
- Improve design/style to reflect uniqueness (74%).
- Improve product quality (67%).
- Engage in causes, philanthropy or endeavors that reflect beliefs/values (63%).
- Limit distribution to maintain the brand’s exclusivity (54%).
Another interesting aspect derived from a similar survey by Lim College found that:
- 66% of millennials may have abandoned what had been their brand of choice in 2013 because the brand no longer fits their identity.
- 66% had a simple desire to switch brands.
- 64% due to the availability of desirable new alternatives.
- 64% because the brand was no longer
2. Omnichannel support – be wherever your customers are
Be available wherever and whenever your customer needs you, across all mediums and platforms. Being online is the new advent. Customer success executives at Tagove tell me that most of their customers demand multichannel support. They have seen customers request video chats, co-browsing, phone calls – a business’s job is to be prepared on all platforms.
Recently, Kate Leggett mentioned that customers always want an accurate, relevant and complete answer to their questions upon the first contact so that they can get back to what they were doing before the issue arose. They are increasingly leveraging self-service and agent-based digital channels for customer service.
According to Receiptful, 83% of customers require some type of live support tool when making online transactions and nearly 74% of consumers depend on social media to guide their purchases.
Gone are the days when a post every day is all you’ve to do on social media for that matter. Having an online presence is about building a rapport with customers – listen to their problems, respond as soon as you can, and ensure that you fulfill all your claims. A quick first response is in fact one of the crucial customer service metrics that needs careful attention.
According to Newscred, 62% of customers feel that online content drives their loyalty toward a specific brand.
A mobile app is the newest in the list of must-haves. Mobile apps have that unique capability of assisting even on-the-go, and that does wonders.
A study by Forrester shows that 57% of mobile users admitted that loyalty programs and points are the top features in a mobile wallet, with 56% giving that title to discounts and deals.
3. Make them feel special at every opportunity you get
97% of U.S. corporate executives state that customers want an efficient (i.e. fast, cost-effective and personalized) level of experience, as identified in a study by Lithium.
Over 50% of shoppers say they would pay a higher price for the customer experiences they value the most and 77% of shoppers would be more loyal to stores that provided their personal, top three customer experiences.
Personalized experiences like remembering the customer’s special events/days and acknowledging them upon contact with the customer almost always add up to customer delight. This can be achieved via your CRM systems. A well-personalized system can help you store individual pieces of information regarding your customers like age, sex, birthdates, well-wishes, etc.
Repeat customers tend to spend 33% more than new customers.
Sending personalized wishes on customers’ birthdays or anniversaries add to the delight and pave the way for closer engagement. The new norm is Megamalls which provide discount coupons to customers on their special days. Personalization is not limited to remembering customer events and acknowledging them. Personalization is more about providing that exclusive experience to the delight of the customer – making them feel special.
Etsy provides a complete, personalized journey to its customers who are exploring their site to purchase news products online. This is different from conventional e-commerce search engines.
4. Pre-empt and assist
Being a concerned and caring vendor/retailer/online store adds to the customer’s delight and acts as a catalyst for customer retention. Who wouldn’t like to receive a warm and friendly welcome or have a dedicated salesperson throughout their visit to a store?
If you’re a retailer, engage your customers – know their requirements, likes, and dislikes. Keep consumers informed and aware on a regular basis so as not to lose that consumer to a competitor.
Most e-commerce companies reach out to customers with emails about fresh arrivals or with an accessory suited to a recently-purchased product. This behavior goes well-appreciated with most customers.
McAfee provides continuous updates on the status of their database of viruses as well as other emails regularly to increase safety measures in order to keep their clients informed.
Not losing sight of the customers is important in order to keep a business in the loop.
5. Exclusive Discounts / Loyalty Rewards are still relevant
Discounts/schemes or customer pull programs may drive customers to try new sellers.
According to an IRI research:
- 66% of customers respond to loyalty cards/discounts.
- 65% to couponing.
- 50% to store circulars.
For repeat customers, attracting customer loyalty is more about providing preferential treatment by way of special discounts or schemes on loyalty points.
Make a customer feel valuable the first time and every time they shop with you – and chances are that they will stick with you for a lifetime.
According to a Thanx survey, 75% of customers approve of businesses who give special treatment to customers who spend more money.
Keep in mind: Discounts are revenue-generation tools. No, it’s not an oxymoron but a fact. If rewards could be shared, 70% of consumers would shop more often and 45% would spend more. Additionally, 60% of consumers would be more likely to join a retailer’s loyalty program if it allowed them to earn extra points or benefits when using their bank’s debit or credit card.
Conclusion
Based on the above-mentioned steps, it is clear that retaining customers requires a genuine effort on the part of a business. Customer retention stems from the relationship built between the company and its customers.
Currently for online business, 41% of online revenue comes from repeat buyers who represent only 8% of online visitors. Moving forward, 80% of company revenue will come from 20% of the company’s repeat customers.
The world is changing in the blink of an eye and businesses need to change, improve and innovate in order to fit into customers’ expectations.
I’d suggest there is a 6th must do: Identify when the customer is at risk. Of seven life stages (beginning from suspect, moving to prospect, and then to first time customer) having adroit processes and protocols for determining when perceived value delivery has become more negative than positive (such as proactive complaint gathering) can help retain customers.who would otherwise see diminished benefit and defect.