Gartner, Bain & Company and many other respected research houses have all produced research showing that retaining a customer is easier and more profitable than going out and finding a new one.
As a result, many organizations have proven customer retention strategies in place. In this guide, we explain what a customer retention strategy is, what the strategies of some of the world’s leading companies look like, and we offer pointers to create your own customer retention strategy.
What is a customer retention strategy?
In the classic leaky bucket analogy, businesses focus on pouring new customers into the top of the bucket, whilst existing ones are leaking out of holes that should be plugged first. A customer retention strategy is a timed and planned strategy to ensure that customers are being retained, and that new customers being added are the right, high quality customers, to give the organization the best chance of retaining them in the future.
A good customer retention strategy should be made up of:
Clear costed and timed goals – what are you aiming to achieve and by when? What sort of improvements are you targeting?
Data on customers and prospects – who are your customers and prospects? Which customers are the highest value to you? Which customers do you make the most money from?
Retention measurement and timetable – how are you going to measure customer retention? And how often? How will you know if you’re improving?
Communication and activity calendar outbound – what retention activities will you undertake and when? What’s the communication plan?
Communication and activity calendar outbound – what are you going to be asking your employees to do differently? How are you going to keep them updated with your new initiatives?
A closed loop feedback process – How will you know if customers are happy with what you’re doing? How are you going to get good feedback from them, and how often? How will you make sure you’re acting on that feedback?
As you create and implement your customer retention strategy, remember to communicate it to everyone inside the business too.
Are there any examples of real customer retention strategies available online?
We’ve dug deep into the industry and found a number of really insightful presentation decks from industry conferences as well as some blog posts highlighting real detail of actions people took as part of their customer retention strategies: