Customer retention and loyalty are the hot topic of today in marketing.
According to a recent report, loyalty is the second biggest challenge marketers face in 2019, right after acquiring new customers. With only one-fifth of Australians loyal to a couple of brands and two in five not taking notice of the brand they purchase, retaining customers has never been harder.
Retention and loyalty don’t only measure how good your company is at getting new customers; it also provides an indication on how well it satisfies their needs.
When you look at some of the numbers, it’s surprising that marketers have only starting to really focus on retention in recent years.
"It’s 5-25X more expensive to acquire new customers, than to retain existing ones.
Increasing your retention by 5% can increase your revenue by 25-95%."
Once brands caught on to the value of retention, loyalty programs took off, especially in the retail sector. Every brand seems to now offer their own specialised loyalty program. But companies are starting to realise that simple points based loyalty schemes are not the magic bullet to customer retention.
A recent report by Harvard Business Review Analytics Service found that “58% of executives surveyed believe their organisation’s approach to customer loyalty is ineffective”.
The implementation of transactional, points-based programs doesn’t seem to be paying off for over half of brands. That’s because there’s so much more to customer retention that loyalty and rewards programs.
“Successful retention and loyalty programs provide customers with truly unique experiences,” says Simone Blakers, CX Consultant at Liquid CX and ADMA IQ instructor. “They have a deep understanding of the customer needs, interests and habits and provide meaningful interactions.”
Understanding the psychology of loyalty is key to developing programs that delivery the kinds of experiences that will delight customers and make your brand stand out. And understanding your key customers will allow you to develop a unique value proposition that will resonate with your audience.
Marketers also need to understand where loyalty and engagement intersect as the two should be closely integrated rather than working separately - especially in the age of the mobile customer.
Brands that can build their understanding around these areas and gain skills in retention delivery and execution will become leaders in the race to earn customer loyalty and advocacy.
Lead the way in retention and loyalty Marketing with IQ’s Retention Marketing Strategy course.