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Taking Stock: How to succeed at customer retention

The current economic climate is causing customers to be more selective. Most businesses can only guess at the reasons customers leave, mainly because they don’t gather that information or develop a formal strategy to retain customers until after they leave.

Here are some tips for customer retention:

1. Find out what customers want and what causes them to stay or leave.

First, conduct a survey with existing customers. Ask customers what they want and need, as well as which specific aspects of your business, products, services they value most. In addition, conduct a separate survey with former customers to find out what specifically caused them to leave.

2. Proactively collect and promote customer feedback.

Don’t wait until there is a problem to contact or follow up with customers. Instead, set up communication channels to encourage sincere two-way communication with them, and then use those channels to actively solicit and collect their feedback.

3. Use technology to manage and analyse customer feedback, and ensure the right people see and hear it.

Companies can easily have as many as 35 or more tools in place to listen to the customer. These tools frequently duplicate efforts and constitute a tremendous amount of time and resources. By the time feedback is tabulated, analyzed and shared, the input is weeks or months old.

4. Analyse customer feedback to gain valuable insights.

Once you’ve gathered feedback from customers, analyse it to find out:

  • The type of customer feedback and the percentage in each category (complaints, suggestions, comments, concerns)
  • The channel most used by customers to provide feedback (Web, phone, in-person, etc.)
  • The underlying drivers of customer loyalty and engagement (i.e. the main reasons that customers do business with you, how they are emotionally connected to your business)
  • The current strength and depth of customer loyalty and engagement
  • New revenue and growth opportunities for your business

5. Immediately address customers’ complaints and concerns.

To make the most of your customer feedback, put together an action plan that focuses on addressing and resolving any areas that are causing customers concern. In conjunction, establish standards of excellence and share best practices with others in your organisation.

6. Take action and measure the results.

Use customer feedback to make improvements, and then measure the impact of the changes you made. Some of the areas that you may want to consider measuring include customer retention rate, revenue per customer, customer referrals, customers saved due to feedback, etc.

7. Actively measure and monitor your customers’ loyalty and engagement.

Customers today are bombarded with attractive offers all the time. If they see a better deal based on price, quality or service, they feel pressure to switch brands or stores. To combat this, regularly measure and monitor your customers’ loyalty, satisfaction and engagement. Then use that information to make adjustments.

8. Create and nurture a company culture that embraces and is committed to using customer feedback.

Embrace feedback by dedicating resources to acting on customer feedback. This involves training all your employees on what they can do to assist you in building a more loyal customer base.

9. Keep asking, listening, analysing and improving.

Customer needs, wants and concerns are constantly changing. So, keep asking and listening to customers’ feedback, and analysing that feedback on an ongoing basis. By doing so, your business will be able to not only retain more customers, but continually tap into fresh, new customer preferences and attitudes that you can use to create new products, services, and programs tailored to their needs.

Barbara Wold has more than 45 years of first-hand retail experience, and is one of the industry’s most sought-after speakers and consultants. 

Taking Stock is Retail in Asia’s fortnightly column dedicated to showcasing opinions from experts in the retail industry.