Why Customer Retention Management Matters
This post was first published in 2016.
The phrase Customer Retention Management can mean everything and nothing at all. It is therefore no surprise that I get often asked what does customer retention actually mean?
For me Customer Retention Management is a tool that helps any kind of business to retain their customer base by providing tailored incentives and rewards. These incentives should not only meet the need of the customer but also exceed his or her expectations. By offering a little extra, people tend to become more attached to a brand and are therefore more likely to return. Those incentives do not have to be only of monetary value but can also involve additional services such as
- 24/7 personal contact
- Better table or seats
- Longer reservation times
- Favourite free newspaper
- Advanced notice on new product releases
- Anniversary reminder.
These small personalised extras can make a huge impact on the overall perception towards the business.
For me it still seems though that most businesses are focusing too much on acquiring new customers instead of keeping the existing ones happy. This is baffling as it is much more expensive to gain a new customer than to retain one.
I am sure every one of us will have experienced the feeling of being let down by a company with whom you have been dealing with for years. This could be your mobile phone provider who offers new customers additional free services such as hundreds of free texts which was never offered to you. Or it could be your local gym which provides new gym members with a two months free membership while you have been paying for years without any discount ever been offered to you.
Some could of course argue that if I asked for it I might actually get the same or similar offer as those newly acquired customers, but it leaves a bad taste in my mouth because I have to initiate contact.
By using well developed and managed retention campaigns, businesses avoid neglecting existing customers and making them feel valued and understood. As a consequence, your client base is more likely to stay loyal to you and will continue doing business with you. As far as I am concerned, this is what Customer Retention Management is all about.
