Is your company losing customers, and you don’t know why? Are you spending a lot of money on advertising without seeing clear results? Do you want to optimize your company’s revenue to avoid unnecessary waste of funds? We may have some of the answers to these questions.
Some of the most successful companies carry out specific actions to retain their customers and to avoid consumer leakage to other competing companies. Here are some guidelines to keep in mind to make your customers loyal followers and save on advertising costs.
Summary
- Retention marketing is a new concept in sales, based on the commitment to retain your company’s customers, instead of making exaggerated efforts to attract new consumers.
- However, customer acquisition should not be neglected either. The two tactics must be reconciled within your company’s strategy in order to achieve the best possible results.
- Specific actions such as improving the quality of service, creating a community of consumers or upselling can help you foster loyalty within your company and, consequently, keep your customers, to the detriment of the competition.
What you should know about retention marketing
Customer retention marketing is a very valuable strategy, both for your company and for your customers. However, when it comes to embarking on the path towards this concept, there might be some doubts preventing you from carrying it out properly. Therefore, we will try to answer these frequently asked questions.
What is retention marketing?
Retention marketing is a new type of marketing based on retaining customers who have already consumed your company’s products or services. According to several authors, it is closely related to relationship marketing, (1) since the main objective is to create a relationship of trust between the company and the customer. In this way, your customer will become a loyal customer of your company, and may even become a prescriber of your products or services, recommending them to other potential customers.
While customer retention is an age-old concept, why is it being emphasized today?
In recent times, and thanks to new technologies, it has been possible to create new marketing techniques. In addition, it has been possible to deepen the classic ones. In this sense, companies have used certain technological advances, such as e-commerce or SaaS, to find it easier to coordinate their customer retention strategy.
What is SaaS?
SaaS or Software as a Service is a model for using software as a service. In other words, it is a way of automating a large part of the distribution and licensing processes through applications, (2) whose only base of action is the Internet.
In this way, the system itself controls aspects such as servers, databases, web coding or storage, to generate outputs. Subsequently, the company will have to apply these results to real life, through concrete actions, within the framework of retention marketing.
SaaS technology allows the system itself to manage different aspects to optimize our activity and produce results.
See the best SaaS Management Software
Why is customer retention important in marketing?
Customer retention is vital for your company for multiple reasons. The first and most obvious is the damage to your company’s image when you lose customers (3). Once they sever their relationship with your company and get a bad impression, they begin to advertise negatively about your company, which also discourages potential new customers.
However, there are also other reasons of a different nature that should be taken into account. For example, retaining customers incurs much lower costs for the company compared to acquiring new customers. In addition, the establishment of a relationship between customer and company through retention makes the exchange much more fruitful and there is more loyalty between the parties.
How is customer retention measured?
Customer retention is a concept that is influenced by numerous factors. From the price of the product or service to the corporate image, many factors make a customer stay or not in our company, especially the quality of service (1).
However, in order to have a clear picture of the objectives you need to set yourself to improve customer retention in your company, there is a formula that can help you. The customer retention rate measures the proportion of customers who stay with your company over a given period of time, compared to the original customers. Therefore, the higher it is, the more fruitful your retention strategy will be.
What are the benefits of customer retention?
Customer retention has a myriad of benefits. Among them, there are some very direct and clear ones, but there are others that are more difficult to glimpse. With some being purely economic in nature and others more related to the company’s image, customer retention is an objective that your company must focus on for success. Some of the examples are the following.
- The loyalty of customers who stay.
- The creation of word-of-mouth flow, i.e., that customers loyal to your company speak positively about it to friends and family.
- Savings in advertising costs, motivated by the two previous factors (4).
- The increase in your revenues and profits, since your customer will be less sensitive to price, and you will save some superfluous communication costs.
- The improvement of your corporate image. Your loyal customers will speak better of your company and will also profess greater admiration for it.
- The sustainability of your company, by maintaining a good demand base with customers who are more valuable to your company.
How to retain customers in my company?
There is no magic recipe to retaining customers in a company. However, it is vital that you give importance to two main aspects. On the one hand, try to offer the best quality of service, providing added value to your customers in their shopping experience. To do this, you can use techniques such as upselling.
In short, enhancing the quality of service does nothing more than improve the customer retention rate, which is the ultimate goal you should pursue. However, you must bear in mind that customers are not numbers and that this formula is only a tool to encourage customer retention in your company and, consequently, their satisfaction and loyalty.
How do you retain customers in B2B?
Customers in the B2B world are retained similarly to other businesses. However, the specific characteristics of this type of business must be taken into account. For example, a useful strategy would be to foster a community among customers in the business sector. This is done by establishing valuable communication channels and creating useful content, focused on the nature of the relevant sector.
Businesses value personalized, quality customer service. It is necessary to offer accompaniment through channels such as telephone or virtual channels, as well as tutorials or information that the company can incorporate into its day-to-day business.
Read more about B2B Marketing
What is upselling?
Upselling is a very effective technique to retain customers in your company. It consists of selling the same product at a lower price, which provides greater value to the customer. To see it more clearly, we can take an example.
Have you ever gone to a supermarket and seen that if you buy more of a product, you pay less? For example, there are times when we are going shopping, and we have to choose between buying 500 g of pasta for 90p, or directly 1 kg for £1. For the second option, we would be paying less in relation to the quantity offered. That is what upselling is all about.
Is it better to go for customer retention or customer acquisition?
Although it is vital and necessary for the sustainability of your company to bet on customer retention, it is true that both strategies must be combined to obtain the highest possible level of revenue. In this chart, we will show you which keys to take into account within each of the strategies.
What are the best strategies to keep current customers?
Customer retention is closely linked to customer loyalty. In general, both concepts aim to establish a relationship of trust with the customer, so that they stay with your company and there is a more fruitful exchange of value. However, this is not achieved overnight. Instead, it is necessary to follow some guidelines that will help you achieve all these goals in your company.
- Service quality. Offer the best possible quality in terms of products and customer support at all stages of the exchange.
- Sense of belonging. Specific actions such as establishing a loyalty card or certain promotions can help your customer feel that they are part of your company and feel more identified with it (7).
- Create community. Use digital tools to generate a two-way flow of communication with the customer. For example, having a presence on social networks, opening a blog or establishing reliable channels.
- Close communication. Organize communication activities (posts, emails, etc.) with a calendar and make sure they are personalized. To do this, you can help yourself with digital automation tools, and don’t forget to include your customers’ names!
- Feedback. Pay close attention to customer complaints and respond appropriately, closely and empathetically. In addition, to improve your quality of service, you can conduct surveys to find out what your customers think.
Examples of successful retention marketing strategies
Nowadays, we can find a multitude of companies that carry out specific actions to retain their customers and make them loyal to their brands. However, here are two successful examples of companies that have managed to use these strategies to generate unique brand loyalty and brand love (8).
The Apple case
The American multinational technology company combines different strategies to create a unique experience for its customers, with which they feel identified (9). In this sense, Apple offers quality products, innovative and cutting-edge design, as well as good customer service. It also creates community through multiple applications and the possibility of connecting all the devices that customers own.
Starbucks uses the senses
The U.S. coffee shop Starbucks offers value to the customer in a very interesting way, using their own senses. This can be seen not only in the taste of its coffees, but also in the aesthetics of the brand, inside and outside the store. In addition, each of its coffee shops offers a special atmosphere, which provides an oasis of tranquillity in the middle of any metropolis where it is located, through the music, the smells and the treatment of its workers.
What tools are available to retain customers in my company?
In addition to the formulas already mentioned and other traditional ways to retain customers, you should know some digital tools that will help you know your customers better, offer them better service and achieve greater loyalty.
Google Analytics is an essential tool in the digital marketing of companies. Specifically, it can be used to build customer loyalty and retain your customers, since it offers a retention rate of customers who visit your online store. In addition, it tracks your presence on social networks.
Read more about Google Analytics
Capturly is a tool focused on both customer conversion and retention. In this way, it allows you to analyze your digital platforms, even geographically. In addition, it allows you to understand the reasons why you are losing customers, allowing you to fix them.
Conclusion
In order to achieve a good customer retention rate, we must pay attention to customer loyalty, since this is the way to ensure that our customers stay with us. To do this, we must bear in mind that our buyers are individuals and, therefore, we must offer them a unique, personalized and quality treatment.
In this way, you will be able to put your company at the level of the most successful companies in the world, which have been implementing these concrete actions for years. In this way, you will be able to turn your company into a reference, both for your competitors, your customers, and the rest of society.
References
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2. Hernández Bravo, A. SaaS and Cloud-Computing: an innovative option for times of crisis. REICIS. Revista Española de Innovación, Calidad e Ingeniería del Software, 2009 [11 Aug 2022]; 5 (1): 38-41.
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3. González CD. The ‘customer retention’. The ‘revaluation’ of the customer and the product offered. Estrategia Magazine, 2006 [12 Aug 2022]; 68.
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4. Pierrend Hernandez SDR. Customer Loyalty and Customer Retention: Trend Demanded Today. Management In The Third Millennium, 2020 [13 Aug 2022]; 23 (45): 5-13.
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5. Valenzuela Fernández LM. Business and marketing philosophy oriented to customer value. Horizontes Empresariales, 2005 [15 Aug 2022]; 4 (1): 17-30
6. Loaiza Torres JS. From the product life cycle to the customer life cycle: An approach towards a theoretical construction of the customer life cycle. Research and Business Journal, 2018 [15 Aug 2022]; 11 (18): 100-110.
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7. Trejo Rosales RD. Benchmarking strategies to improve Customer Loyalty of the company Premiere de los Olivos, 2017. Lima, Peru: Universidad Privada Norbert Wiener, 2017 [15 Aug 2022].
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8. Treviño T, Morton F, Robles C. You love it, I love it, too: a social network analysis approach to brand love. Administrative Sciences, Theory and Praxis, 2016; 12 (2): 211-225.
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9. Fernández Serrano C. Experiential marketing as a loyalty tool. Barcelona, Spain: Universitat Autònoma de Barcelona, 2018 [15 Aug 2022].
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