Develop a customer retention strategy

Contributors

@paul-boag


Business Benefits

Increase repeat purchases and boost revenue.


Research your customers to find out what they need most.

Here is the kind of marketing data you should analyze:

  • UX data: If the shopping experience is full of friction, why would anyone return?
  • Email performance: What happens or doesn’t happen in post-purchase emails to convert first-time buyers into repeat buyers?
  • Customer service: Poor customer service is why 82% of U.S customers leave a business, so perhaps looking at customer service scores might be where you start?

Include an open-ended exit survey to understand why your customers are leaving.

A/B test your messaging to see which performs best. For example, changing Why did you cancel? to What made you cancel? provided a near 19% response rate for Groove.

Create customer feedback forums and in-line customer support to collect customer feedback.

For instance, HubSpot Ideas is a forum for feature requests where users can submit and upvote ideas, helping HubSpot understand which development projects may have the highest existing demand.

Develop the product, site, and offers based on customer feedback.

Evaluate whether a loyalty or rewards program will drive repeat business.

Survey users to see if there is an interest. Create a small proof-of-concept project with limited scope, for example, geographic areas or audience group. When you introduce the program more widely, start by targeting your most frequent buyers first. Listen to their feedback and develop the program based on their feedback.

Appeal to your customers’ emotions and make every customer feel like they truly matter.

Focus your retention efforts on your communications with existing customers around how they would like to be viewed. For example, Urban Outfitters uses typography and design to communicate a real hipster vibe. Its newsletter doesn’t just deliver sales and promotions, but also videos and music from obscure bands.

I favor offering rewards for long-term customers. We tend to give the best deals to new customers, but that makes existing customers feel underappreciated. Instead, keep your best offers to customers who have shown loyalty.

Also, financial rewards are not the only way of showing you appreciate customers. Small gifts and even handwritten notes can make a huge difference.

These tokens of appreciation are particularly powerful if they come unexpectedly. If you offer an incentive of a gift, people factor this into the transaction. But if the gift comes as a surprise it creates a desire in people to return the favor through continued custom or even recommendation.

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I love the idea of offering rewards to existing customers to keep them for as long as you can - however, this can also be an open invitation for abuse. Not mentioning brand names but years’ back, we’ve had that issue with ‘smart’ customers for this subscription-based vehicle safety and security system in the U.S. Back then, those who are threatening to cancel their accounts would be given anytime between 30-100 free calling minutes for their hands-free calls. Some customers would pretend to be irate with the call agents just so they can get those minutes.

My question is: How do you strike a balance to avoid scenarios like this?

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Hey @marissa.sayno welcome to the community.

A lot will depend on context and also technical feasibility in the product itself that would leave itself open to abuse. In a lot of cases these things are done by one-off vouchers and etc so it is simple.

Setting some conditions can also protect you from repeat abusers, capping the number of offers or to help you identify authentic cases.

We where discussing this recently about a situation where there was no technical solution and it was clear we had to monitor the situation and learn more. Perhaps giving the opportunity to yourself the to kill the offer without long-term consequences.

Do you have a specific scenario in mind?