The cost of customer retention programs to encourage customer loyalty is often less than the costs associated with marketing for new customers. Businesses interested in reducing their advertising budget or wanting to make waves in social media sites must excel in customer satisfaction. Satisfied customers are more likely to return as well as recommend products or services to friends. The Consulting & Implementation Services (CIS) in Australia reported that businesses lose about 15 to 20 percent of its customers annually because of lack of customer retention programs. CIS further found that if these businesses had reduced defects by at least 5 percent, then they could have experienced an increase of profits from between 30 to 125 percent.
Businesses should first conduct a customer surveys to determine whether or not the company is meeting needs and requirements of its target market. Going directly its market by conducting customer surveys is the strongest method for determining whether it is providing products or services that are up their expectations. In addition, use the opportunity of conducting customer surveys to find out how the target market ranks the company against its competitors in terms of quality, reliability, price, value and other areas important for sustaining customer loyalty.
Customer Retention Programs
Carefully analyze the results of the survey to see where the company stands with its customers. Ensure that needs and values that are not being satisfied, plus any competitive weaknesses are accurately noted. Develop a strategy using the results of the customer surveys to reposition the company or otherwise meet the needs and values of its customers. The strategy could involve reducing the amount of defective products, increasing the level of customer support, including a warranty or guarantee, or decreasing the product’s price. Review how competitors are meeting the needs of the target market and their weaknesses to find a competitive advantage.
Implement the strategic plan for gaining customer retention and loyalty. Take the results from the collected data to develop a customer retention program. This plan should include specific details, milestones and deadlines, plus assign accountability. Ensure that the workforce understands the importance of this plan and that open communication is in place for questions. The company could experience resistance from its employees if they do not understand the company’s need for change. Developing a reward system to encourage employee support for implementing the customer retention program could prove very beneficial.
Continuously Monitor the Market
Monitor the changes continuously after implementation. Conduct additional customer surveys to ensure that the changes made either meet or exceed their expectation. In addition, verify with customers how the company now ranks in comparison with its competitors to see if the company now holds a competitive advantage. Depending on the level of changes made, monitor the market continuously to ensure that the changes are satisfactory and that perception of the company over its competitors has improved.