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Don't Lose Your Customers: Use This Checklist

Posted by Bryan Wang
According to Harvard Business School, increasing customer retention rates by 5% increases profits by 25% to 95%.

Remember W. Edwards Deming’s assertion that, “Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them”.

In fact most of a brand’s revenue comes from its loyal, repeat customers. This is as your loyal top 10% customers spend 3x more per order than the lower 90%.   Also note that if you can get a customer to come back and make a second and third purchase they have a 54% chance of making subsequent purchases.

As such customer retention is important and necessary. But how should your company keep your customers?

Here we go over key points your brand should be checking off;Know Your Customer Base

It’s important to go beyond collecting simple customer demographics , to instead getting an in-depth understanding of customer behavior.

Try and go beyond having a general idea of who your business’s customer is. Your marketing department or CIO may know based on your product or service that your customers are female or male, but that is not enough. Now you may be thinking that you have to get your team familiar with ‘Big Data’ and collect and go through reams of data. Don’t worry. That is not the case.

Firstly don’t just think numbers will tell you the whole story. Knowing how many women vs. how many teenagers shop with you isn’t enough. Instead try and get a grasp of customer behavior, knowing which customers act what ways to try and see why they would want your offerings and how and why.

You can use the data that you have at hand in new ways to know and understand your customer base in this way.

To do this create customer personas. Your customer base shouldn’t be homogeneous, don’t throw a net out to catch ‘everyone’. Instead segment your customers into personas such as Jane the suburban soccer mom, or Jim the outdoors-man. Now find out why these different personas want or would want each of your products/services. Get your customers to register for offers and email communication to get some information. Have the relevant departments in your company do some market research and surveys. Now use your data to understand how would they prefer to be targeted with advertising.  Would Jane be best to target after her kids are asleep or Jim when the weather isn’t good and he’s inside on his social media accounts? Also how do they want to buy from you? Does a busy mom like Jane prefer online ordering while Jim wants to see the product in-store?

Also use your data to know which customer personas who are not shopping with you and think about why this is the case. Then address the gaps which may be resulting in the loss of business whether it is a new marketing technique or adopting mobile wallet at your locations.

An advanced POS in which your gift card and loyalty programs are integrated with your POS can get you important customer data right from where your sales are made. For example having a loyalty program through which you collect important customer information processed within your POS (try one like Vexilor) can help tell you which products/service are popular with which customers. So with a loyalty program integrated to your Vexilor POS you know that Jane shops most often in the afternoon and buys products mostly for her children. Now you know which types of offers to send her through which medium at what time. Very valuable info which will help you not only keep Jane continually engaged and coming back to shop with you, but also drive more sales.

Anticipate Industry Change

A big part of knowing your customers is knowing your industry. Successful business leaders know what their customers want and that goes beyond simply identifying customer personas. No one expects you to be a fortune-teller, able to foresee what will happen next in your industry. What you should be is an expert not only in your product or service, but also in the area in which that product/service lies. If you make crockery then know about the food scene and latest ‘foodie’ trends, if you make basketballs know about which athletes and teams are most popular at any given moment.

Do you sell make-up? Then know about what make-up trends YouTube stars who give make-up tutorials are creating.  Do you provide sports equipment? Then monitor which exercise trends are on the rise and which ones are no longer popular. 

If you don’t think knowing your industry inside out is important then take the example of Kodak. The historical, 124-year-old brand filed for Chapter 11 bankruptcy protection in 2012. Kodak’s stock price was $90 per share in 2007 but had plummeted to 76 cents by 2012. What contributed to the massive downfall of this once popular, global brand was the inability to see change in their industry and recognize its importance. When digital photography was taking off Kodak refused to see it as a prevalent and important shift in the way consumers took and stored photos. Instead of adapting to the new technology Kodak stuck to the belief that consumers would still prioritize their film cameras and use print photography. The result was competitors such as Sony and Canon taking chunks of their customer base.

You should see change in your industry as it is happening and try to understand how this will change or influence the purchasing behavior of your customer personas.  This is key to keeping your customer base.

Communicate With Them

Your relationship with your customers should go beyond just when they visit your locations. It is important to stay on your customers’ minds even when they aren’t shopping with you. To do this target special promotions and emails specifically to their customer personas. Do not send the same email to Jane the soccer mom that you would to Jim the outdoors-man. Tailor your promotions as well, using a well implemented loyalty program to determine what products, spend bands and shopping times each customer persona prefers.

For example there would be no point in sending outdoors-man Jim promotions on kids’ soccer shirts via email at two in the afternoon when he is at work. The timing and product are not aligned with his customer persona. What does work is sending timely promotions or marketing pieces such as an informative blog post related to your product/service or inviting your customers to like your Facebook page where you post regularly. Interacting with your brand will keep your customer base from forgetting you and will increase the likelihood of them thinking of you when it comes time to make a purchasing decision.

Remember if customer retention is at the top of your mind then consider a Givex loyalty program. For more on loyalty program benefits and uses read here.

Topics: Point of Sale