In this opinion piece, Patrick Sim, senior vice president for the APAC and MEA regions at Epsilon (pictured above), talks about ways companies can go about building lasting relationships with their clients.
If there’s one thing that companies have learnt from the pandemic is the importance of keeping customers happy and having them continuously come back to the brand. While providing a positive customer experience is key, extending those positive experiences to build brand loyalty is crucial for retaining customers, and ultimately to ensure longevity of your brand.
The importance of customer retention
Customer retention is the act of keeping customers loyal to your brand, influencing repeat purchases and preventing them from going to a competitor. Companies with high customer retention offer a product or service that provides enough value to customers for the price that they don’t feel the need to stray. This helps to strengthen customer loyalty and keep customers satisfied.
A report from ResearchAndMarkets.com anticipates the Loyalty Programs Market in Australia will increase 75 percent from US$3.7 Billion in 2021 to reach US$6.5 Billion by 2026. The report noted that the growing usage of loyalty and rewards programs among consumers in Australia has also prompted businesses, large and small, to launch their programs over the last three to four years.
This is a huge opportunity for Australian companies. While new customer acquisition is important to sustaining business — it is equally important (and probably less costly) to focus on nurturing relationships with existing customers that know your brand, are already interested in your products or services and are more easily persuaded to repeat purchases.
Retained customers are ripe to become loyal customers, not only buying your brand repeatedly, but also making an emotional connection and influencing those around them (like friends and family) to purchase.
Three customer retention strategies that work
- Know your customers
The best method when it comes to retaining customers is knowing them , and it all starts with data. Data is one of the most valuable resources in your arsenal when it comes to retaining customers.
The proliferation of access to first-party data (from website visits, emails, mobile apps and social interactions) allows businesses to truly understand their customers. But it shouldn’t stop there. Companies can harness this information with third-party data (like people’s interests, preferred travel locations, hobbies, basic demographics) for a holistic customer profile they can use to engage existing customers online and offline, to drive emotional connections.
A Forrester Wave: Loyalty Service Providers, Q3 2021 report noted that “understanding the behaviours, needs, and motivations of loyal customers is a requirement for any successful loyalty strategy.”
By using data and insights to lead their customer retention marketing, companies are setting themselves up for long-term loyalty success with their customers.
- Engage on omnichannel
According to the 2020 Omnichannel Statistics Report, omnichannel strategies see 287 percent higher purchase rates and 13 percent more AOV compared to single-channel marketing strategies.
In today’s digital economy, companies need to consider using all channels to reach customers. A successful retention marketing strategy begins by mapping your customer journey, then connecting with existing customers across all channels seamlessly (apps, mobile wallets, web, online and offline). That way, you’re meeting the customer where they are, and rewarding them in the currency of their choice, resulting in higher purchase rates, while keeping them engaged and satisfied with your brand.
An omnichannel strategy goes beyond transactional, one-dimensional discounts and instead offers personal customer experiences.
- Make emotional connections
Customers who feel an emotional connection to a brand are far more valuable.
During the pandemic, consumers were looking for more than surface-level connections with brands and this will continue well into a post-COVID world. Consumers still crave that trust and authenticity brands brought to the table in 2020. And companies that want to retain customers, need to humanise their brands and create emotional connections with their customers, to garner even greater customer loyalty.
Loyalty programs help customers better connect with the brand. If brands can provide flexibility and compassion to customers as well as generosity and goodwill, they will find that customers will be more willing to engage with them, especially since customers are providing companies with personal data which allows brands to establish and nurture a more intimate relationship with their customers.
So, don’t think you can slack off when it comes to your existing customers. One of the keys to better customer retention is relationship building that you can further by creating emotional, trustworthy connections.
Strong customer retention programs have the ability to:
- Surprise & delight with rewards ( clever use of experiential and unique rewards with high perceived value)
- Improve customer service through real-time, relevant 1:1 communication
- Boost satisfaction by anticipating customer needs
- Engage customers on social media channels
Loyalty is an outcome, not a program
Truly progressive brands have evolved to look at all of their existing customers and new customers through a loyalty lens; not only those who are enrolled in their customer loyalty program. These innovators practice brand-level loyalty, using their customer retention strategies and tactics to create exceptional customer experiences, inspire passion and trust, and engender long-term relationships to keep repeat customers.
Emotional connections serve as the steppingstone to enlist customers into a permission-based customer loyalty program. From there, the brand can glean the data and insights to deepen the relationship and deliver more personalised experiences that inspire a share of life, share of wallet, time and heart from customers. It’s also important that customers feel confident that their privacy and preferences are being respected, which will keep them coming back.