Loyal customers buy more, buy premium (with higher margins), cost less to serve, and bring new customers by referring to friends, so it really pays to invest into retaining clients. However, most ways you see companies using are ineffective and/or expensive, thus not providing any true and long-lasting competitive advantage.
#1: Provide unique value (they can't get elsewhere)
The most important thing has nothing to do with marketing, loyalty, or any sort of tricks. The companies with the most loyal customers don’t actually shine on any of these fronts. They don’t need loyalty programs, great customer experiences (on all fronts), long guarantees, high reliability… But oh boy do they build products that their customers love.
#2: Provide amazing service or customer experience
If you cannot really differentiate on the product, the next best thing is service, customer experience and if you extend your thinking a bit to leading-edge, customer success. There are few areas to look for:
- Welcoming, onboarding & success: new customers are unsure whether they have made the right choice when choosing you (welcome letter), whether everything will go smoothly (delivery, unboxing experience, onboarding), and finally whether they will actual get the benefits you promised (customer success)
- Turning fails into victories: Customers who have had a bad experience, but which was handled exceptionally, seem to become very loyal. They know you can be trusted even when things go sour.
#3: Staying on top of mind: If you cannot differentiate between either of the two, communication is always where you can try to make the difference.
Most companies are actually very louse in keeping in touch with their customers leaving them vulnerable and eager to pay attention to your competitors’ lures.
- Don’t forget them: Buy not keeping in touch, you are communicating that you don’t love them back. You forget, so they forget you. So stay in touch frequently. Call them, email them, mail them…
- Get and keep attention: Think a friend who always talks about herself but never asks what has happened to you. So boring!
Content marketing is all about helping your customers or clients to succeed and get value before even asking them to buy your stuff or read about how well you are doing.
So talk about things that they want to read/listen/watch, that is, about them, in order to get and keep their attention and possibility to tell a bit about how you are doing and how you can help them.
- Make them feel they belong: Communicate in such a tone that your clients or customers feel they belong to your tribe: Tone of voice, images, words, examples, testimonials you use…
Seth Godin summarises marketing into phase: ‘people like us do things like this’.
Do you make them feel ‘people (or companies) like us do things like this’?
#4: Gamify the relationship to drive them deeper and bond deeper
Think if there are game-like mechanisms you could use to ‘gamify’ customer relationships by e.g. unlocking some benefits. Unfortunately, this is a complex topic to explain in a short post, but really, really powerful when done right. And does not necessarily eat your profits.
#5: Use rewards wisely as they will eat your profits
Finally, we are entering the classic loyalty/retention tactics zone. That is, solving the problem with money (not brains). Gamifying with rewards can be a good way to retain customers/clients if you cannot find better in upper categories. However rewards don’t really build true loyalty, they make the relationship rational (in rewarding terms, such as money) and are often expensive to run.
#6: Keep exit doors closed, but not locked
All customer relationships end sooner or later, for whatever reasons. The exit is an opportunity to solve the reasons why they are leaving, keep them and even sell them more. But you need to ask why and act accordingly. Create offers for key reasons, so you have them ready.
But don’t make the exit too complicated. Actually, you can often identify who have a retention problem, at least in subscription business (e.g. SaaS) by looking at how complicated they make leaving. Such tactics just create bad word of mouth.
So here you are. Now go and retain your clients.