Customer Retention Program
October 7th, 2009 → 1:47 am @ Richard
Find Out How You as A Business Owner Can “Lock Customers In” by Following Simple Proven Steps
A good customer retention program can help you reduce the costs of marketing your business. It is always more expensive to get a new customer than to keep an existing one happy and ready to buy again. Existing customers are more trusting of your offers, more willing to listen to your communications, and like the idea of dealing with a solid, regular supplier. Existing customers are your most likely source of new customers too – through referrals and positive word-of-mouth.
Attracting new customers is expensive. You’ll have advertising costs, sales costs and staff time costs to consider. New prospects are harder to convince and it takes a lot more effort to weed out the serious buyers form the ‘tire kickers.’
So why then, do you spend more time and money chasing new business? In this article we’ll outline what a customer retention program is and what it should look like – as well as how it can help your business in more ways than you’d think.
Incentive-Based Customer Retention Programs
Some programs often use incentives to reward and encourage customer loyalty over time.
For example, you could consider any of the following programs:
1. Discount programs
2. Loyalty programs
3. Card-based programs
The purpose of these kinds of programs is to encourage repeat and long-term business by introducing (normally progressive) price discounts. For products and services that compete on price – like air travel, grocery items or insurance – incentive models work well.
Contact-Based Customer Retention Programs
Incentive and price-based programs can be hugely effective where price is the most important thing. But sometimes price is not necessarily the most important thing – service levels, personal recognition and quality can all be deciders.
Contact based programs (often termed Customer Relationship Management or CRM) focus on dedicated communications channels – like customer newsletters. These are often combined with incentive and reward based programs as described above.
How to Create a Good Customer Retention Program
Before you even consider a retention program you need to make sure you’ve got the basics covered – excellent customer service and high quality products or services.
- Find ways to show customer appreciation and create a system that allows customers to give their opinion or feedback on your product or services.
- Provide information and useful content – helping your customers become more successful and get the most out of your product or services.
- Monitor results in detail – There’s no point offering discounts if they’re not increasing sales volumes.
Of course, a strong retention program should be a part of every business but if you don’t have the time or expertise to develop, implement, or manage one yourself, you should consider bringing in an outside firm to help.
What Next?
• We do it for you: If you’d like help developing your customer retention program, click here for more info about the lead generation services we provide
• Do it yourself: For more lead generation ideas
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