Wednesday, January 21, 2015

Customer Retention

Are you having customer retention problems? Is it difficult to meet your growth goals when a significant portion of your business development efforts is used to replace lost customers?

It is much more expensive to attract new customers than it is to retain existing ones.

It is time for some organizational soul searching. Why are customers leaving? What is not compelling about your brand’s value proposition?  What is not working for them? What are you doing wrong? What could you do better?

One can use a combination of qualitative and quantitative research to understand what is going on. At a minimum, you want to talk with these three groups:
  1. Current customers
  2. Former customers (people you were not able to retain)
  3. Competitors' customers

For the first group, you will want to explore the following:
  • Attitudinal loyalty to the brand
  • Emotional connection to the brand
  • What they like about the brand experience
  • What could be better
  • Rate the brand’s delivery on a variety of potential customer benefits

For the second group, you will want to explore:
  • How long they were customers
  • Why they left
  • Why the brand ceased to hold their interest
  • Whether they have gone to a competitor or left the category altogether
  • If they have gone to a competitor, what they like better about the competitor

For the third group, you will want to explore:
  • Attitudinal loyalty to their brands
  • Emotional connection to their brands
  • What they like about their brand experience
  • What could be better

For all three groups, you might also want to explore perceptions of the brand's personality.

Once you have gathered and analyzed this information, you will need to develop and commit to an action plan to solve the identified problems and create a stronger value proposition and delivery.

Good luck!

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