Retain Customers by Building Community

 

While some may think that an annual customer retention rate of 80% is good, that means you loose one out of every five customers each year. Theoretically, this translates to 100% turnover every five years. And, as most business owners know, it is much more cost effective to retain a current customer than to acquire a new customer.

There are many approaches to retaining customers. Frequency programs purport to do so as do other customer loyalty programs. CRM systems are supposed to help with this. Some companies try to lock customers in through multi-year contracts and automatic rebilling. But the best approach to customer retention is community building because community building creates emotional connection and stickiness. People stay with the brand because it has created a community for them.

Think about how powerful coffee klatches, book clubs and bridge groups are. Imagine if you could create that type of community with your brand's customers.

So, what are some community building techniques?

• Producing user conferences.
• Creating customer advisory boards and customer steering committees. 
• Engaging customers through Facebook pages and other social media platforms.
• Holding customer meet-ups.
• Creating local brand-focused customer clubs.
• Creating physical spaces where customers can interact.
• Holding customer holiday parties and appreciation events.
• Recruiting panels of customers to beta test your new products.

Hallmark sponsors local Hallmark ornament collectors' clubs. Tesla Owners Clubs hold frequent owner meetups. Many wealth management firms hold holiday parties for their clients. Orvis offers free fly tying and casting clinics for its customers. Robert Graham offers exclusive closed door events for people who achieve Master Collector status within their Collector's Club. Most colleges and universities invite their graduates back to reunions every five years. Large churches create small groups focused on different interests to retain parishioners. Patagonia supports grassroots groups working to find solutions to the environmental crisis. Eastern Mountain Sports encourages people to share their outdoor photographs on Instagram with #goEast. SONY's Playstation has create an online space for gamers to connect. Harley Owner's Group (HOG) has more than one million members and holds HOG Rallies around the world. P&G created "Being Girl" as a resource for teenager girls to connect and find answers to the difficult questions that growing up entails. Lululemon's brand community offers free yoga classes, festivals and events and even an experiential store in Chicago featuring fitness studios and a juice bar.

If you want to retain more customers, identify and implement ways to create community among those customers. 

Ten Ways to Successfully Position Your Brand in Overcrowded Markets

Today, brand managers are increasingly at a loss about how to differentiate their brands. In most product and service categories, every unique and purchase motivating position has been claimed by one or more brands. Product and service categories have matured, brand research has gotten sophisticated and competitors have successfully filled all of the brand positioning niches. So what is a brand manager to do to discover a new unique and compelling brand position?

Here are some ideas:

1. Identify, create and own a new "category of one." The Strong National Museum of Play did this by repositioning its brand from a children's museum to the only museum of play. 
2. Through qualitative research, discover one or more compromises all of the brands in the category are making with their consumers and then design a business model and brand to overcome these compromises. CarMax did this vis-a-vis traditional used car dealerships and Uber did this vis-a-vis traditional taxicab companies. 
3. Choose a valued benefit that has never been a part of the category. Apple did this with the introduction of smartphone apps. Southwest Airlines did this by owning "fun."
4. Add an element to the brand that no other competitor in the category has added. Opaque did this. It introduced the concept of dining in the dark. 
5. Make an outrageous version of a traditional product. Check out Loudmouth Golf for wild clothes. 
6. Combine two or more products into one or two or more functions into one product. Victorinox Swiss Army was one of the first to do this with its knives. 
7. Focus on a niche market or on one market segment. Orvis and lululemon do this, as does Lane Bryant. 
8. Create a character that gives the brand a distinctive personality. Kellogg's Tony the Tiger was one of the first, but GEICO's gecko,  Progressive Insurance's Flo and Jamie and Pistachio's elephant, Ernie are also examples of this. 
9. Go left when everyone else is going right. Naomi Klein did this with her No Logo book when everyone else was writing about the power of brands.
10. Use a new material or technology that no one else is using. SmartSolve has created environmentally friendly dissolving paper, pouches, labels, thread, tape and adhesive. 

What do all of these approaches have in common? Out-of-the-box thinking.  None of these brands would have become what they became if their managers had applied linear or incremental thinking. 

If you are interested in this topic, here are some other blog posts that might be of interest to you:

• Branding in Highly Competitive Categories
• Differentiating on the Unexpected
• 50 Ways to Differentiate Your Brand
• 6 Powerful Ways to Differentiate Your Brand
• Sources of Brand Differentiation
• Creating "Category of One" Brands
• Creating "Category of One" Brands
• Breaking Customer Compromises
• Branding Water
• Just for Fun - The Loudmouth Brand

By the way, the Interceptor vehicle pictured above is a car, boat, plane and helicopter all in one, applying idea #6 above.