A question that can be answered depending on the position you are in as an organization. To make a choice you need to know who your customers are and how much revenue they bring in. The customer pyramid model, devised by Jay Curry, is based on the 80-20 rule. 20% of customers provide 80% of sales. As an organization, you want to establish a solid foundation in which existing customers provide stability for the organization.
You want to retain the customers who bring in 80% of your turnover, or the upper part of the pyramid. These are probably regular customers who regularly purchase products or services from you. It is ideal to let these customers rise as far as possible in the pyramid. Consider, therefore, from which of your existing customers – large, medium and small – you could get even more.
It is always cheaper to expand existing customers than to attract new customers. Try to get the most out of your existing customers. Consider how your existing customers would prefer to be approached. Personal contact is often the best way to ring the bell, stop by, drink coffee!
That is why your marketing strategy is primarily focused on retaining these customers. This is also called retention marketing.
The benefit of retention marketing?
The purpose of retention marketing is to build long-term relationships between organizations and customers. This is because it encourages repeat purchases. But why is retention marketing a good approach to retaining customers? Of course, what is always very important is the value that the customer offers to the organization. Retention marketing increases this value, customer-lifetime value. A long-term relationship yields much more value than a one-off conversion. The chance that customers will come back to you is greater if retention marketing is used properly in addition to the right service. The more often a customer returns to you, the higher the value of the customer.
It has already been said, but not unimportantly, the quality of your service and retention marketing reinforce each other. “To get more out of existing customers, the moving company UTS literally visited every one to ask: what else can we do for you? Then it turned out that customers for manual and maintenance services sometimes receive ten different parties. We can do that too, thought UTS, so it has established a whole new industry for handyman services. The advantage for their customers is that they only must switch with one party. UTS generates a lot of extra revenue with it. ”The marketing of this service is focused entirely on existing customers. (Retention Marketing)
6 success factors
I assume for a moment that you are offering a quality service, so you still have to take into account 6 success factors for a successful retention campaign.
See the customer as a person.
With a human approach, the chance is greater that the customer makes a repeat purchase. Start a conversation with your client and determine which approach and communication channels should be set up with this client. This is not yet self-evident for many companies. Look around at a few websites. For some, after a few minutes, no one comes to ask if you can find what you are looking for. As a customer, you want to find what you are looking for as quickly as possible. For example, we have learned from Leoprinting that our customers like to ask their questions directly via our chat on the website. Make sure you organize the organization in such a way that you can respond quickly so that you meet your client’s expectations.
Attention for the customer
Logical but too important not to be named! You as a customer want to be taken seriously and understood. That is why it is also very important to think along with the customer and discuss new possibilities to achieve goals. By giving personal attention a customer feels appreciated. As soon as a customer feels valued, the chance of repeat purchases is increased.
A complete product or service
Your customer has a certain expectation of your product or service. Keep in mind that this is not only about the product but also the way the order to delivery process went. These factors form the complete product.
Why does a customer order from you? That reason is very important. This is because of the added value for a customer. Has the customer chosen you because of the price, has the customer gained confidence in your company thanks to previous conversations or was the delivery super-fast? For these reasons, a customer also comes back to you faster.
Processes within the organization
To stimulate repeat purchases, other processes are needed than those that are aimed at acquiring customers. For example, you can use incentive programs. With this you reward customers who are loyal to your organization. But also think of an unexpected “personal” present.
In general, marketing and communication strategy is focused on general communication. This usually means that the information is generic, focused on general products. While the existing customer indicates what he or she is interested in based on behaviour. This means that communication with existing customers to make retention marketing successful requires more targeted information for existing customers.
Delivering more targeted and customized information and communication gives the customer the feeling of attention and he/she gets added value.
Which tactic can I apply now?
Now the big question is of course, how do you approach retention marketing? There are various tactics that make retention marketing successful. This way, loyalty campaigns can be used. These are, for example, discounts on follow-up orders or savings campaigns. Albert Heijn often does savings campaigns. If you do some shopping for a certain amount of money you get stamps with these stamps you can go to the Efteling or the zoo for a day.
Remarketing is also a form of retention marketing. This is useful for customers who have shown interest but have not yet purchased. Let them get to know your range and your skills several times. Give them a free sample or a catalogue that contains great projects.
Everyone likes to receive a gift and is also a tactical move when you want to apply retention marketing within your marketing strategy. With this, you show as an organization that time and attention has been paid to the customer, for example by means of a personalized promotional gift.
There is often contact by telephone or email. By visiting your relationship, your company gets a face. That makes the relationship more personal. A face gives more confidence than just a voice or emails.
Retention marketing is important in retaining customers and building long-term relationships. This blog is very general oriented. Study well your own company, customers, products and information that you have. With that information, you can enter retention marketing in a way that works for you.
Do you want to exchange ideas without obligation about maintaining your existing relationships? Feel free to contact our marketing team, we are happy to help you further!