3 Important Aspects of Customer Retention for Any Business
Customer retention is easier said than done. Though many marketing analysts agree about its importance, the implementation of it is paramount to a company’s survival. For a company to be unfocused in its customer retention strategy is a company that will see its fortunes reversed rather quickly.
Setting the tone for customer expectations is probably the most important facet for determining customer satisfaction, (assuming that a company’s product or service is adequate). This is because if a customer’s expectations are met, then the customers are satisfied. And if their expectations are surpassed, then they are extremely satisfied. Hence the need to set expectations low (within reason).
An important study from the Swedish School of Economics and Business Administration outlined three aspects of expectations which can be very dangerous for a company:
- Fuzzy: Letting the customer feel at fault for not knowing what to expect from your company’s service.
- Implicit: When a customer has built-in assumptions for how a product or service should be, and therefore will be comparing your product/service to their prior experiences, often resulting in high expectations.
- Unrealistic: Though the reward is high, unrealistic expectations are usually not met, and therefore results in an unsatisfied customer.
The key to managing expectations is to make things clear from the outset, by clearly identifying what a company’s product or service can offer. By clarifying all details, a customer won’t be fuzzy or unclear about what they are getting. The more they know going in, the better they can understand the process and the result.
Service & Support
The worst way to lose a customer is by being unavailable. If a customer is reaching out for support or assistance, this implies that he or she is still interested in said product or service, and is giving the company the opportunity to retain them as a customer!
That is why losing a customer due to a lack of support is truly crushing, as it is completely avoidable.
One recent research study from Stephen F. Austin State University discussed an important strategic advantage for small businesses in that they can offer superior support than their big business counterparts. “With the changing environment of retail sales, where giant discount chain stores are gobbling up market share, the chance of survival for the small business may hinge on its ability to provide outstanding customer service.”
This is not to say that big businesses can’t also benefit for outstanding customer support. The point is, however, that many companies do indeed overlook many aspects of customer support and service, and it is vital for any business to continue to survive. Offering superior support and service by way of availability and attention is something that every customer can both appreciate and likely remember.
Ongoing Customer Analysis
On a more macro level, one important facet that can go a long way in retaining a customer is understanding one’s existing customers, and catering toward their needs. One particularly useful strategy is customer segmentation, in which a company divvy’s up its customer base in order to understand and identify the needs of its customers. The knowledge gained from this analysis can provide immense insight toward improving a company’s product or service.
On the other spectrum is customer profiling, in which a company profiles various groups of its customers into different personas of customers, often by using different characteristics to differentiate different personas. It often serves as a very sound baseline in order to ascertain insights about a company’s customers. Understanding a customer profile can go a long way in terms of brand promotion.
Futureproof Your Company
Though there are many additional aspects and strategies for customer retention, the three listed in this article would provide a thorough base for any company to move forward with their customer retention strategy.
Starting with expectation management, a company can ensure that they can likely meet the needs of its customers, provided that their product or service is working well. Should there be any hiccups, customer service and support is absolutely crucial toward keeping said customers. And, in order to figure out what a company’s customers enjoy and expect, a thorough analysis would prove fruitful in this regard. With these 3 aspects in place, a company should find itself heading into the future safer than before.
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Shlomo is the founder and editor of Startups #nofilter, where he interviews startup founders and CEO's about their companies, and blogs about the latest in hi-tech and gadgets. Speaking of gadgets, Shlomo also runs a baby tech website called...