Did you know that it costs on average 30 times as much to acquire a new customer compared to the cost of retaining an existing one? That’s a huge difference, and it can result in massively improved profitability for your brand if you can transition to becoming more focused on customer retention.
Customer retention strategies and best practices will differ, depending on whether you’re running a B2C (business to consumer) business, or a B2B (business to business) business.
B2C customer retention strategies
One of the most effective B2C customer retention strategies is a loyalty card. By giving customers points, discounts, or freebies for continuing to make purchases from your store, you encourage them to continue to use the store. The key trick here is to make sure that you’re offering enough value with the card that your customer sees themselves getting value out of it.
Another hugely effective strategy is what is called ‘co-creation’. In co-creation, the customer provides a type of feedback to the business which directly influences the creation of new products or services. A great example is the ‘pizza tycoon’ campaign that Dominos ran, in which consumers were encouraged to come up with their own pizza toppings, and would get a small percentage of revenue from each one sold. This campaign was highly engaging, allowed consumers to customise their own experience with Dominos (creating their own flavours), and provided them incentive to continue to engage with the brand.
Personalising your interactions
It’s also important to personalise the interactions that you have with consumers. Collect data on customers – what they purchase, and when (the loyalty card is excellent at providing this data), and then use the data to reach out to the customer with products and services that will be of greatest interest to them. The more you can demonstrate that you ‘know’ your customer, the greater the retention rates will be.
Have stand-out customer service
Finally, don’t forget the importance of the basics; for any B2C business, there’s every chance that your customer is going to want to interact with someone in your business. Make sure that staff are properly trained to provide a brilliant customer experience. This means they should have expertise in each product that you sell (or at least, the ability to research that information quickly), and are taken through regular refresher courses.
A good example is JB Hi-Fi, where each section of the retail store has its own staff at hand who really know what they’re talking about. So, if you need information on laptops, cameras, or TVs, you’ll interact with a different expert each time, and they’ll know about every product available to choose between.
B2B customer retention strategies
Have a top-quality product or service
With B2B business, it’s even more important to retain customers, because new customers come from a much smaller pool. It’s also harder to retain the customers, as any dissatisfaction with your product and service will prevent retention. If your product doesn’t work as advertised, or causes some disruption in your client’s business, then you are going to be costing your client real money, and that’s not something they’ll forgive. You need to have staff and support instantly available to answer questions or problems that the client might have, and exceed every agreement outlined in the contract.
Invest in engaging with your customers
You also need to invest more resources in proactively meeting with each individual customer. The client should have a dedicated sales and support contact (so they can get to know that person and build a personal relationship with them. It’s important that the client’s sales contact is proactive in creating an ongoing dialogue, and that the approach to that relationship is such that the sales person looks to genuinely understand the business challenges that their client faces.
Loyalty programs for the B2B industry
Loyalty programs work just as well for B2B customers as they do B2C, though you’ll need to slightly adjust how they work. B2C is characterised by less frequent, but larger value purchases, or alternatively an ongoing month-to-month retainer. A collection of ‘points’ doesn’t work as it would with the frequent accumulation that happens in a B2C environment.
Instead, loyalty can be rewarded through the incentives to your sales team. Perhaps you sponsor a sports ground. Tickets to the corporate box can be provided to the top sales agent to take his/her top clients to an event. An overseas junket could work in the same way. For clients on a monthly retainer, Christmas is an ideal time to reward their loyalty with some kind of personalised gift or gesture.
The biggest weapon you have in retraining B2B customers is the relationship between your sales representative and his or her contact in the client. Fostering a strong, close working relationship is critical in making sure that they continue to buy from your brand.
Collect the right data for on-point customer retention strategies
Whether you’re selling B2B or B2C, it’s critical that you collect, and then use, good quality data, so that you can truly get to know your clients. A platform like TractionNext will allow you to take your customer retention strategy to the next level. Contact us for a demo.