What tools do you have for customer retention beyond price competition?
There are many who want to acquire and retain their customers solely and exclusively through price competition. This typically only works for a while.
And building customer loyalty is not a stable business concept.
First and foremost, be proactive. Customers typically stay with you for the following reasons:
- you give something plus and with that you will really be the best for the buyer
- just out of habit
- you are simply in a monopoly position and now they can’t go anywhere else (if you’re reading this article, I don’t think this point applies to you)
If you want a loyal companion, buy a dog.
In the long run, price competition can only and exclusively undermine your own liquidity. You will always have a competitor who is stronger than you in terms of capital, so he can beat price competition. There will also be someone who, while not stronger, just stupid, and takes the job at a price even below cost price, or just sells with a zero balance. Whatever the current case, it can take the buyer away from you.
Acquiring new customers is always much more costly than retaining old ones, so retaining customers is your job. Let’s see what are the factors you can do yourself to retain your customers.
Customer retention with loyalty card
People love to collect all kinds. In terms of customer retention, you hit several birds at once:
- only those who have been your customers for some time or have already bought a certain quantity from you receive a discount: ie they have already benefited you
- those in the “collector” type will also receive an extra gift with this
- using it well, you can gather data about your consumers for your subsequent promotions
With a targeted DM letter sent according to the interests of your customers, you can offer them promotions that they are already open to. If you combine sales intent with giving extra information to your customers, you can expect them to come back to you.
This extra information can draw the customer’s attention to events other than everyday, or just provide good advice to the customer.
You will not be able to take this step if you only operate with price competition. You will simply not have money for it, after all, if the buyer does not pay for the delivery, you will do so for your own pocket. Of course, you can specify that this discount is only valid above a certain order value.
It is important for customer retention to make the process as simple and fast as possible. With free delivery you make a kind gesture to your customer, and you make the processes even more transparent.
Ethical concepts, charity collaboration
This addresses fair trade advocates and those who, for reasons of conscience, support a particular goal.
For an average company, profit is paramount, which in turn sets you apart from the average. Charity (even if we’re just talking about a “simple” garbage collection) communicates your core human values to your customers. With this step, you give to the community, and if you think about it, you’d rather go back to shopping yourself where they don’t just look at how much money you’re leaving there.
Selling custom products is also beneficial for customer acquisition and customer retention
To do this, you need to know your target market as accurately as possible. The more accurately you serve your customer needs, the more certain you are going to buy from you even if you are not the cheapest in this. This unique product doesn’t necessarily need to be divorced from the reality, I mean things like:
- selection of foods by composition (sugar-free, lactose-free, vegan, etc.)
- size range
- meeting the needs according to the origin of the raw materials (eg: domestic product, handmade product, etc.)
You can open a new market for yourself with completely unique products, after all, you will be the only one from whom they can get the product or service. At least for a while.
Building brand / brand loyalty as one of the cornerstones of customer retention
This requires more serious energy investment, as well as more serious marketing activities. After all, then you need to define your entire message and build everything else accordingly. It sounds simple to describe, but if you’ve seen it in more detail, you know I’m talking about a labor-intensive process.
It also won’t work too much if you burn your profits with price competition. After all, you will be busy making a living.
In terms of customer retention, this step is one of the best long-term solutions. You must have seen Coca-Cola vs Pepsi fans fall in each other’s throats to see which cola is better. You don’t have to start a war, you have to go far enough to get to a higher shelf in the costumer’s head. This way, not only can you be sure that he will constantly look for the given product with you, but he will also recommend you.
After sales customer management
This is not a DM letter to help with the next sale. You may be working in an industry (such as car sales or furniture manufacturing) where your customers rarely return to you, but you have to live.
After-sales customer management is part of customer retention through customer satisfaction. Here are answers to questions such as:
- How much can your customer reach you after payment?
- What is your procedure / How do you deal with the issue of warranty and liability?
- How do you help the customer to make better use of the solution you are selling? For example, do you give tips on how to preserve the condition of the product in the long run?
By dealing with these issues well, the buyer can return to you, recommend you to someone else, or request additional non-warranty service from you.
Sales of related goods – customer retention and profit growth at the same time
Sales as customer retention? This is nothing but upselling and cross-selling.
You may ask how increasing your own profits will help you have returning customers. Take the simple example, you sell shoe polish next to shoes. The cream obviously prolongs the life of your footwear, so your customer will also benefit. If you do not get this add-on, they are obviously looking for a solution elsewhere. If they get it from you too, they will buy there next time.
Adaptation to market trends
Are you still selling the same way we’re in the ’90s? Wondering if you have fewer and fewer customers?
The pace of life of today’s shoppers has accelerated compared to the past, but life has become not only faster but also much more comfortable. If you still have the same system as you used many years ago, it’s too complicated for today’s people.
From which segment do you have the most customers registered as your main target group? What are their needs, how do they like to shop? If they don’t like going to the store, don’t force it even if you’ve spent a fortune on it anyway. Be available online or go out to them in person.
Hiring and retaining the right workforce to have returning customers
You don’t have to find the perfect workforce, you have to find the best one for that position. Be able and willing to hire and keep.
Imagine a restaurant where the environment is beautiful, the prices are completely fair, the food is divine and the waiter is not only clumsy but also rude. Once you have the picture, I don’t need to explain further why this point is important.
Building retention at the company level is also a process, but it pays off in the long run. An employee with the right knowledge and attitude can do wonders, whether it’s warehouse management or communication.
- What are you doing to get your customers back to you?
- Which of the above points can you start to implement today?
- What do you see as the biggest challenge of customer retention? How can you solve this?
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