Customer retention strategies: A complete waste of time?

In the current economic climate, you can understand why doubt can creep into the minds of marketers regarding the value of investing in customer loyalty. If consumers are looking for better value alternatives to their current brand choices then perhaps acquisition should be the priority when it comes to budget allocation.

 

Certainly over the last two years it is possible to identify groups of customers who have become both increasingly price sensitive and also less committed to brands they have been loyal to previously. The supermarket industry is a great example where once great relational loyalty propositions are being overshadowed by price promotions and greater promiscuity from the customer base.

 

 

However, research still highlights that the probability of selling something to a prospect is only about 2-20%, while the probability of selling something to a customer is 50-60%. A big problem for brands, though, is that customers can all appear to have the same likelihood or opportunity to be loyal when first acquired, and yet clearly some customers end up being more loyal than others.

 

 

What the current climate does demand is new thinking about the best way of keeping your customers. Rather than executing passive retention strategies which assume that customers are yours to keep, it is critical to think more aggressively and focus on ‘anti-defection’.

 

 

Semantics? Not at all. Anti-defection is about earning loyalty. It is about using every touchpoint at your disposal to recognise the status of your relationship with the customer and their propensity to repurchase and responding to their changing needs and perceptions.