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How Do I Increase Customer Retention?

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  • Written By: N. Madison
  • Edited By: Jenn Walker
  • Last Modified Date: 15 November 2016
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There are many steps you can take to increase customer retention. Among the most effective may be improving your customer service, as many customers will stop buying from you if they feel mistreated, ignored, or undervalued. Effective public relations campaigns can help you to hold onto your customers as well. Additionally, incentive programs and sales, and events that cater to your customers' unique needs and interests may help keep them loyal to your business.

One of the best ways to increase customer retention is by focusing on customer service. Often, one of a customer's main reasons for leaving one company for another is because the customer service is poor or lacking altogether. Usually, customers value both their money and their time. If your business representatives seem not to value a customer's money and time, he may move on to another company that has better customer service practices. This company may then hold onto your customer by showing him how much it appreciates his business.

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Public relations efforts can also go a long way when you want to increase customer retention. Once you've obtained a customer, you may think the quality of your products and services should be enough to keep him with your company. Often, however, public relations strategies serve to remind a customer of why he chose your company in the first place and help renew his loyalty to your business. For example, positive news stories about your company may help increase customer retention. Additionally, they may offer the added benefit of helping you attract new customers as well.

You might also find incentive programs helpful when it comes to customer retention. Your customers get a product or service in return for the money they spend with you, but it may help to offer them a little more. For example, you could offer a free product or service for every five or 10 purchases a customer makes. If you cannot afford to give a product or service away absolutely free, you could alternatively offer it at a significantly reduced price.

Sometimes customers like to feel they are special. You can help them feel this way by offering sales and special events that cater to their interests and unique needs. For example, you could send personalized emails to your customers, featuring sale items in which they are likely to be interested. You can use past purchases, polls, and surveys to determine which types of sales and events you should offer.

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Discuss this Article

oasis11
Post 4

Some customer retention programs also involve acknowledging a customer’s birthday. Every year a few weeks before my birthday, I always get a card from a handbag store that offers me $20 towards any purchase in the store because of my birthday.

It is really nice and it does make me feel more loyal to this company because it seems so thoughtful. I think that this is a great customer retention technique.

I also wanted to add that cruise lines also offer frequent travelers additional benefits. They usually categorize their customers based on the number of cruises that they had taken with the cruise line. Travelers that book their next cruise while still on their vacation receive a dramatic

discount on their next cruise and some travelers that travel with the cruise lines enough times will have the chance to dine with the captain and participate in an exclusive cocktail party with the captain and his staff.

These extra perks really go a long way in keeping customers satisfied. I know that it would be really fun to dine with the captain, but I am not quite there yet.

mutsy
Post 3

@Moldova - I know what you mean. My husband flies the same airline carrier and stays in the same hotel chain no matter what. The reason is simple. When we go on vacation we almost always get free airline tickets along with free hotel stays because of my husband’s status with both companies.

Since he is a frequent traveler both the airline and the hotel chain reward him for his loyalty. He is also offered a specialty lounge that offers complimentary drinks, snacks, and even a shower when he has to wait in the airport that is sponsored by the airline.

This is why he would never think of flying with another airline carrier or staying in a different hotel chain. I think that these are the best customer retention programs out there,

Moldova
Post 2

@Cafe41 - I agree that getting input from existing customers is important because you have to understand what your customers want before you can implement a customer retention strategy.

I know that a lot of companies offer surveys for their customers to fill out and in return they provide discounts and free products. I also really think that if you increase customer loyalty programs you will find an increase in the customer retention rate. Customers love getting free things.

Some companies offer reward points based on the customer’s spending patterns and these rewards could be used to purchase additional merchandise. Other companies offer rebates in the form of checks or let the customer purchase things with their rewards points

from a catalog. I think that this is an excellent long term customer retention strategy because when the customer signs up for the rewards program they have to give their demographic information and the company will get to know who the average customer is and can send them coupons to entice them to spend more.

When a customer has a accumulated enough points to get items for free they will be encouraged to continue shopping with that company because they already had a taste of what the rewards were like.

cafe41
Post 1

I think that a great way to improve customer satisfaction is to invest in a focus group representing actual and potential customers that may not shop with your company yet. A focus group can give you very specific information about what you are doing right and what your competitors are doing better.

I was involved in a focus group for a retailer that wanted to develop a better customer retention statistics. We were carefully selected based on our buying patterns and asked what are opinions were of the retailer as well as the retailer's competitors.

The biggest problem that the retailer had was the lack of responsive personnel in their stores as well as the level of staffing

. There never seemed to be enough people around that could help you.

The retailer took the information from the focus group and not only hired a lot more people but their also promoted many of their best employees and had them become the experts in the area.

This allowed the customer to get the help that they needed and the other employees had a position to aspire to. This was a smart plan that helped to increase its customer loyalty significantly because they had the best assortment of products at the best prices, so there was no reason to go anywhere else. I was really surprised by the drastic changes that they made.

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