11 Ideas for Improving Customer Retention
In preparation for an annual off-site meeting with a major client, my consulting firm developed a checklist for relationship marketing program with copywriter Mark Hallen. Here are several ideas we came up with to use as benchmarks when assessing program performance and opportunities for improved results.
1. Realize your retention program starts on day one.
If your business model involves lead generation, day one begins with your handling of the lead. You not only affect conversion, but the tone of the entire relationship.
If you're generating most of your new customers at retail, day one is what happens when customers open the box after they've left the store. Are you doing enough to get them to register with you? How can you help them use the product more easily?
2. Assume all new customers are created equal.
As a general rule that worked in the past, a new customer generated through direct mail always had a longer lifetime value than a customer coming through direct response TV, inserts or retail. Now, because of the Internet and because consumers are using all their channel options, we don't know how good a customer someone's likely to be. Only performance can dictate that. Therefore, you won't be able to pick and choose which customers to invest in with a relationship program. As the relationship unfolds, you can reduce or increase the investment.
3. Don't try to start the relationship in the middle.
While an action-based loyalty program can be augmented at any time, a true relationship program gets the biggest return by beginning at the beginning. There is less effect with older customers.
4. Make it easy to be a customer.
Remove some of the necessary barriers you set up for suspects and prospects (e.g., automated e-mail and voice response, long login forms). Think about a dedicated phone line for repeat customers. Some companies have different (e.g., easy reorder) Web sites for customers than for prospects.
5. Reward and recognize longevity.
You can afford to give long-time customers discounts, special services and red carpet treatment. Don't think so? Do the math. In many cases, it's not even necessary to invest in a formal "loyalty" program. Recognition can go as far in exceeding customers' expectations as rewards. Stage and invite best customers to "inner circle" events, even if the customer has to pay for the trip. Example: For its Select Banking customers, Chase arranged a week-long golfing trip to Scotland. Even having a dedicated phone line for long-term customers can help them understand how much they're appreciated.