Customer Retention

Where all Efforts Begin: Winning New Customers

Attracting customers is the main goal of any and all marketing efforts. Once you know your target group, you can deduce from them where they are and which platforms, media, and channels they use. Through individual sales and marketing strategies, companies win new customers through a targeted approach that motivates them to buy. These can be advertisements, referral marketing, discount campaigns, events, or classic acquisitions. It is important to always keep an eye on the market and new customer acquisition activities to continuously advance.

It is possible to encourage new customers to make purchases without spending large amounts on advertising. In particular, this works in such a way that the product and its properties (USPs) are not the focus of the activities as usual, but an image or emotional benefit (UAP). The spirit which stands behind it could communicate that it makes life easier, meaning there is more time for other beautiful things like hobbies. Or the buyer is promised more success. Depending on the product and target group (B2C or B2B) emotional aspects play a greater or lesser role in the purchase decision. Companies should therefore deliberately emphasize this and use it to acquire new customers.

Maintain Relationships and Build Real Customer Retention

Unlike customer loyalty, which emanates from the customer, companies can actively influence customer retention. These efforts have a direct impact on customer satisfaction. Goals and measures for customer retention can be derived from corporate strategy and should be seen as ongoing processes in customer relationship management (CRM). In addition to marketing, IT and the service department should also be involved. The customer must have a positive experience at every point of contact so that they buy again and develop a long-term relationship with the company.

There are several different types of customer retention:

Since the first three items listed are involuntary customer bindings, marketing and service should focus on the last two types of customer retention, which create customer loyalty. Economic ties are the goal of discount campaigns and loyalty programs, emotional ties are the goal of product, service, and image campaigns.

But be aware – customer retention is not the same as customer loyalty. While customer retention can be involuntary through the first three points mentioned above, customer loyalty is based entirely on positive experiences. The customer is loyal to the company or brand and plans further purchases in the future – or considers them possible and, given the circumstances, likely. Brand loyalty can also be supported by targeted marketing activities. A brand must be distinctive and easy to grasp, with its products having a rational or emotional benefit.

Depending on the business model, a bond based on monopoly or contractual obligations can also be part of the strategy. However, these types of attachment do not release you from the need for emotional attachment. When a contract expires or economic circumstances change, the question if you have managed to convince the customer of your company’s offerings in all the essential points suddenly becomes relevant.

Marketing Measures to Strengthen Customer Retention

Loyal customers are the best brand ambassadors. There are many ways to bind customers to the company, for example with one-time actions or customer loyalty programs. A bonus program based on a points system can even be set up, for example, if you do not yet know the customers well. However, getting to know each other is essential for individual approaches to customer retention. For this purpose, the buyers are divided into customer groups, for example with regard to certain properties or usage channels. The decisive factors here may include usage behavior, buying behavior, expectations, or their demographic background.

The following proven measures can be used as cornerstones for individual activities:

Holistic Measures for Successful Customer Relationships

Successful customer retention requires a holistic strategy in which the marketing department and others participate. A high level of customer satisfaction is essential for good customer retention. For this, the customer must have an all-round positive shopping experience. This starts with the first contact with the company, goes through the purchase decision and the purchase, and also affects complaint management. Close cooperation between marketing, sales, customer support, and IT is needed here.

• Customer needs and feedback must be taken seriously and incorporated into future developments. When companies meet their customers at eye level and listen to them, this not only produces valuable suggestions for improvement but also gives customers a feeling of appreciation. The implementation of an effective Voice-of-the-Customer program should therefore either have already taken place or should be at the top of the list in customer relationship management.
  
  
• To create sustainable satisfaction, the customer must be delighted. The wow effect can be caused by many things, for example by a delivery that arrives faster than expected; through proactive care; or by responding quickly to customer inquiries or solving problems.
  
  
• It is not only in classic advertising that the so-called „penetration“ is used - the effort to bind the customer to a brand or a product by repeatedly contacting him across channels. This will also help maintain customer engagement: due to the recurring interaction with various marketing measures, customer retention to the company is strengthened and existing customers can become regular customers. However, it is important not to overshoot the target and to make contact too often or in too many places. This quickly creates the opposite effect.

Turn Customers Into Regular Customers – With Retention Marketing

If you want to turn existing customers into regular customers, you can use retention marketing and set targeted impulses to increase customer purchases. The most profitable customers are determined on the basis of an internal ranking and especially „looked after“. That also includes being open to letting less interesting customers move if necessary in order to have more resources available for the really important customer group. Retention marketing is based on a well-maintained database with the relevant customer information and a strategically planned lead management. The goal is that of a lower churn rate.