Increase Customer Retention by Outrunning Your Competition
In today’s marketplace, many companies are competing for the same customers. Your customers today won’t remain yours tomorrow unless you are taking action consistently to retain them.
Outrun Your Competition
Customer retention is more than keeping your customer satisfied. Even when a customer is satisfied, you can lose them to a competitor who offers them a better price or an attractive discount. Customer retention involves taking action to outrun your competitors before they take away your customers.
Customer Loyalty Programs
Customer loyalty programs are one of the best ways of retaining customers. According to Wikipedia, “Loyalty programs are structured marketing strategies designed to encourage customers to continue to shop at or use the services of businesses associated with each program.”
Advantages of Loyalty Programs
Customer loyalty programs allow you to focus on your best customers and improve customer satisfaction levels. By increasing loyalty, you can increase profitability and extend the time customers keep doing business with you.
Loyal customers become your best advocates. They recommend you to others, saving you marketing costs. A loyal customer’s endorsement is more powerful to their friends and family than any advertising campaign.
Doing It Right
Before setting up a loyalty program, closely study your competition. After all, if your loyalty program cannot keep your customers from getting distracted by your competitors, it is not working, is it?
Loyalty schemes must also be designed to offer customers what they will appreciate, but they should also be devised with profit in mind.
Also, you’re trying to reward customers for behaving the way you want. So, be clear about what you want. For instance, do you want repeat business or do you want your customers to spend more?
Make sure that your scheme is simple and the rewards you are offering are attractive and attainable. Offering your customers a small gift after spending a lot will leave them feeling insulted, but you must also make sure that you can recover your costs relatively fast.