Why Customer Retention Strategies Are Important
Posted By: DSG
Converting a prospecting customer and making a sale is one of many steps in the customer experience journey. While most brands spend an inordinate amount of effort on the steps that lead up to conversion, the termination of a customer relationship should be considered as central as the initial activation of a CX lifecycle. Accepting that a customer relationship will typically diminish in the “final phases” of the customer experience lifecycle is a tragic outcome to resign pre-conversion efforts to. In fact, the post purchase phases in the CX lifecycle hold as much potential if not more to secure future sales, repeat purchases, cross sales and up sales.
Once the customer reaches the post purchase steps in a CX journey, influence has already been applied. All the demanding steps preluding to the purchase have already been travelled and a relationship and rapport already established with a brand. Provided that the purchase phase of the CX journey was a positive one and resulted in need gratification, there is no reason why a brand should not leverage off the already existing brand affiliation and re-enact the active purchase over and over again.
Customer retention strategies intervene at the final stages of the CX lifecycle when customers begin to believe or experience apathy from a brand following the initial conversion. It is at this juncture that a brand can take advantage of the sense of indifference and reduce customer leakage by re-investing in repeat sales, up-sales and cross selling opportunities. By providing customer support and paying close attention to voice of the customer (VoC) feedback, brands should be poised to initiate their customer retention strategies in order to preserve converted customer relationships before they churn.
Retention strategies encourage a brand to keep the customer that they are already invested in, engaged in the CX lifecycle for as long as possible. Efforts expended to convert prospecting customers are far more expensive and require much more exertion that building sustainable relationships with an existing customer base through customer retention programmes.
The implementation of a calculated customer retention plan will not only encourage repeat purchases but through active customer cultivation, nurtured customer relationships result in successful up-selling, cross-selling, advocacy and word of mouth referrals. Through the delivery of customer retention strategies brands are geared to consistently deliver on their value proposition and remain true and committed to the overall brand promise.