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What is Customer Retention Marketing?

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  • Written By: Sheri Cyprus
  • Edited By: Heather Bailey
  • Last Modified Date: 10 June 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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Customer retention marketing is basically the promotional rewarding of customers to create loyalty and keep them dealing with a particular business. Since it typically takes more resources to acquire new customers than it does to keep the old ones, retention promotional strategies are popular marketing tools today. To keep a solid customer base rather than lose customers to their competition, many firms offer consumers ways to save money and/or get gifts in exchange for their continued business.

Card loyalty programs of different types are widely used in today's marketplace. The idea behind this type of customer retention marketing is that by creating a membership card and treating consumers as members of the company rather than just buyers, they will want to stay with that business rather than change to a competitor. Membership retention programs may offer points upon purchase that can later be added up to redeem for free products. Some customer retention marketing allows for instant savings on purchases or a free item when a certain number have been bought. A simple example of this is a card with spaces to buy seven items with the eighth then being given to the customer free of charge.

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The idea of the customer getting something of value to him or her for free often works to retain his or her business. Not only is the customer rewarded for a series of purchases with a free product or service, but the habit of buying from that particular company may become a regular one. Customer retention marketing strategies always strive to keep the customer purchasing products or services to keep them from wanting to try competing businesses.

Airlines especially tend to offer retention rewards. They typically have customer loyalty programs that award points each time that a particular airline's tickets are purchased. The strategy is to encourage customers to earn and save points by continuing to buy airline tickets only through that particular company in order to eventually get a free flight. Many supermarkets issue membership cards worth points for merchandise.

In order to create successful loyalty programs in customer retention marketing efforts, marketers must study their particular consumer base to understand their needs and wants. This is one reason why many businesses encourage customer feedback on their services and products. If marketers know the buying habits and desires of their customers, they're likely to get a better understanding of what types of rewards would be worth the continued business from the shoppers' point of view.

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