Seven Strategies for Improving Customer Retention Initiatives

  • 1
  • April 24, 2017
Seven Strategies for Retention

7 Direct Response Strategies To Boost Customer Retention

How to get more from the people who already know and like you!
Many marketers are plagued with a recurring, chronic problem: Business goals demand such focus on short-term acquisition goals that it’s easy to be  “blindsided” by annual lapse and churn rates. Attracting new customers too often means failing to retain current patrons.

Customer Retention INsight — Current Customers need communication too!Why do marketers struggle with customer retention?
One common misconception is that agencies expert in direct response are best focused only on acquisition. Retention is relegated to a secondary campaign. Or activity managed by a general ad agency or from inside an organization. Another faulty assumption is that “Our customers already know us – we don’t need to market to them.” All due respect, both are flawed notions.

If your retention effort kicks in only when you feel you are about to lose a customer, you’ve likely already lost them. Acting at this stage shows desperation, not appreciation. If you truly value your customers (and their investment with you), these strategies should start on Day 1.

Studies show that increasing customer retention rates by as little as 5% can increase  profits by as much as 95%. Additionally, the consequences of ignoring retention often compound over time. It is clear that focusing on retention strategies should be a priority.

No one plans to avoid talking to their customers. Or deliberately takes them for granted. Here are seven considerations to help make building a retention approach practical and doable:

1. Define clear objectives for retention
To help guarantee your results, draft a clearly defined series of S.M.A.R.T. goals. To succeed, get more granular than “I’d like to keep my customers.” Instead, ask yourself:

  • “What are my goals for customers after they make a purchase?”
  • “What do I want them to do next?”
  • (And my personal favorite): “How can you use retention to increase acquisition?” Yes, retention can actually assist your acquisition efforts, through word of mouth and referral strategies.

2. Develop actionable consumer intelligenceCustoemr Retention Q:Why buys from you and why?
What do you really know about your customers? A previous post highlights how to establish a defined target audience. Looking at your target audiences, which segments purchase from you with the greatest regularity? And why? Attempt to find out:

  • Who are your most frequent or loyal customers?
  • Why did they buy from you?
  • Are there any purchasing patterns (e.g., when or how often they purchase)?
  • What are their common perceptions of your product or service?
  • What are their biggest pain points?
  • How can you appeal to their needs?

It isn’t a Herculean task to get your hands on these data points. But it is possible that they’re located in multiple locations. They may not all be in Web analytics applications (e.g., Google Analytics). If the data are not showing conclusive answers to the above questions, ask your customers directly. Many people like being asked their opinion. I can recommend readily available Web-based applications to help do this. Use onsite reviews and ratings to solicit feedback. Try a survey (tools like Survey Monkey make this a breeze).

3. Routinely communicate with your customers
Once you understand your customers, especially their motivations and needs, you can begin to craft targeted communications. Ways to educate, cross-sell, and re-sell them become clear. How to accomplish this will vary from campaign to campaign.

Shortly after your customers purchase your product or service, they are bound to have questions. You don’t need to bombard them with overly detailed information. But new customers value receiving aid in easily processed chunks. (Think of drip irrigation versus a fire hose.) Share tidbits via quick retargeted ad units, emails, YouTube videos, whitepapers, seminars, workshops, blog content, etc. Highlight little-known features or added benefits of your product or service. The bottom line is to keep your customers coming back for more.

Customer retention Insight #4 - One-To-One attention can be practical and affordalbe4. Personalize whenever possible
Customers love one-on-one attention. Given time and budget, that can just feel impossible. It doesn’t need to be. One way to enhance a relationship is through personalization. Leveraging a CRM or marketing automation platform makes it much easier. Giving each customer the attention they need, expect, and deserve can be timely and cost-efficient.

Occasionally, unexpected messaging proves most beneficial. Emailing your customers on their birthday, anniversary date, or over the holidays is always a wise decision. Use their first name when addressing them. People who feel valued will overwhelmingly buy again. No one likes to feel unimportant or taken for granted.

5. Ask for feedback
When you communicate with customers, you will get both positive and negative feedback. And both are useful:

  • Positive feedback helps identify “influencers.” People who might be enlisted to evangelize your organization, products, and services. This reinforces that you’re doing things right and helps spread the good word.
  • Negative feedback is also valuable and shouldn’t be seen as a nail in the coffin. Many dissatisfied customers never complain; they just never come back. And give you no explanation. A complaint gives you the opportunity to identify an issue, address it, and avoid repeating it. Issues handled in social media channels or public forums can have the added benefit of demonstrating you care and resolve questions. Be honest. No product or service is going to be 100% perfect, but you can always be genuine.Custoemr retentin Insight: "bad" feedback is good, too!

The most important aspect of collecting feedback is being prepared to act on it. Soliciting input, but then sitting on it, sets false expectations and wastes time for both you and your responders.

6. Reconnect with dormant customers
It’s all too easy to forget former customers. Connecting with past buyers who are familiar with you is one of the easiest (and quickest) ways to boost revenue. Find out why they haven’t purchased from you lately. Demonstrate you still value them. This will typically result in not only a repeat purchase, but a loyal and persistent customer.

7. Establish meaningful KPIs — and monitor successes
Even if you jumped in and implemented all six of the previous points, there’s one more critical step: measuring the effectiveness of your retention marketing program. Each organization and campaign has varied metrics for success. Customer lifetime value is just one common metric. Others include: customer lifetime value by channel, customer retention vs. attrition rates, and Net Promoter Score.

You’ll find more detail in a blog post I wrote about retention metrics and KPIs. A critical point is that retaining ALL customers is rarely the key to success. It is more important to identity and selectively invest to retain your best customers.

Remember: Selling to existing customers should be easier than selling to new customers
Imagine if Amazon.com spent all of its effort making just one sale to each person. Crazy, right? Now’s the time to adopt their proven approach. Don’t stop at the sell – continue to value and nurture each customer you convert. Happy and engaged customers will be more likely to continue to buy from you, less likely to jump ship, and more likely to help spread the word about how awesome you are to do business with. It’s a win-win-win: for you.

Contact us today to find out how DMW Direct can help with your direct response retention strategies and tactics.

Leave a Reply

Ready for more Action from your marketing? Get Started