Customer retention is about keeping the customers you’ve already acquired. If you’re in an industry where customers make multiple purchases over the years, you should be very focused on retaining those customers by:
Delivering service that’s consistent with your value proposition and brand
Cross-selling, up-selling and obtaining referrals from existing customers
Developing programs to increase customer loyalty and decrease turnover
Understanding the lifetime value for different segments and using that information to improve your marketing
Prioritizing retention as a major focus in your annual marketing plan
Customer retention strategies will vary depending upon your industry. They can be as simple as providing excellent customer service, or as complex as delivering the same integrated campaigns that you deliver to the rest of the market.
Customer Retention Value
How much have you invested in sales and marketing over the last few years? Thousands? Tens of thousands? Millions? Tens of millions?
Studies show that it costs ten times more to generate a new customer than to maintain an existing one. If you have a small number of customers, losing a few could cripple your company. Even if you have a large number of customers, a small increase in your retention rate should dramatically increase profits. In fact, in the book, The Loyalty Effect, Fred Reichheld writes that “… a 5% improvement in customer retention rates will yield between a 25% to 100% increase in profits across a wide range of industries.”
With Growth Panel, you can measure customer loyalty, design campaigns for existing customers, and improve your customer service. Small improvements can yield noticeable results for your bottom line. Large improvements could deliver an exponential return.
Customer Retention Tools in Growth Panel
Develop a Service Strategy: Develop the strategy and determine the resources needed to effectively manage and maintain customers.
Measure Customer Loyalty: Define the data you’ll need, how to use it, and how to obtain it. Project customer loyalty.
Create an Account Management Team: Define job requirements, and hire and train account managers.
Create Campaigns for Existing Customers: Outline different campaigns for existing customers to reach retention goals.
Improve Customer Service: Improve live customer service and account management, and add other service tools, like self service websites.
You might need to address customer retention if:
You’re losing customers faster than you’re replacing them
You’ve never measured customer retention
Your customer acquisition costs are higher than industry standards
You’re in a mature market with a lot of competition
Your revenues are flat
What they’re saying...
Your tools have helped me identify what questions to ask to program directors, as well as to admissions reps, and develop marketing campaigns with logics (sic) and clear target numbers behind them. Also, creative briefs are very handy when communicating with my writers and designers. They eliminate the room for confusion and misunderstandings that used to occur during the creative development stage."
Director of Marketing, The Musician’s Institute
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