Most companies understand the value of retaining customers vs. the cost of replacing them, but many still struggle with attrition issues. Too many companies view and manage attrition as a point-in-time event, not realizing that a customer’s likelihood of remaining a customer is constantly influenced. Companies need to develop more holistic retention strategies that proactively manage customer engagement to preempt customer defections and maximize loyalty. Here are some tips:
Focus on your best customers. To have the greatest impact on your bottom line, focus first on your most valuable customers.
By definition, these are the people you can least afford to lose to competitors and who will get you the greatest return on your marketing resources.
Understand your customers’ needs. Know your most valuable customers’ needs and how meeting them (or not) impacts their likelihood to remain your customer. These needs can be uncovered using a combination of qualitative and quantitative research. Understand how competitors are currently addressing those same kinds of needs and differentiate your own tactics.
Identify interaction points with the greatest reach and frequency. All customer interactions with your product and brand are engagement opportunities. Their outcome can result in engaged or disengaged customers who are more or less likely to attrite.
Think broadly when developing your strategy and prioritize based on reach and frequency. Engage at “moments of truth.” There are key decision points, or “moments of truth,” in a customer’s lifecycle that are make-or-break for you. These moments typically occur either early on when customers are still formulating their opinions or later when they have a service need or problem. At these times you should engage your most valuable customers by not only meeting, but exceeding their needs.
Use leading indicator measurement to manage and assess impact. Because retention is a lagging indicator of engagement and loyalty, it’s important to be able to measure how well you are influencing a customer’s experience earlier in their lifecycle.
Deploying a survey tool at “moment of truth” interactions can provide both a leading indicator of retention as well as a way to assess what is and is not working.
Applying a customer engagement approach to retention puts you in a position to proactively stem attrition. By focusing first on your highest-value customers and their needs at “moments of truth,” you can influence the likelihood that they will remain customers and drive significant value to your bottom line.
John Strabley is manager of marketing strategy and planning at Quaero. He can be reached at [email protected].