If you Google search ‘customer retention statistics’, you’ll see the world and his wife are offering a ‘must-follow’ step by step plan to keeping customers loyal. Whilst everyone’s recommended actions will vary dependent on the products they provide, there is one thing they all agree on: customer retention is REALLY important.
80% of your future profit will come from just 20% of your most loyal customers.
In certain industries, loyalty comes naturally. We all have a preference for where we’d rather do our weekly food shop and we know which clothes stores will provide us with the perfect fit. Other industries can hedge their bets based on geographical location, or the specific demographics of their target audience.
But how do you cement your brand in the mind of a customer, when you operate in a competitive industry such as telecoms, utilities or insurance? The ‘need’ for day to day engagement with your brand is low and the core services/products either have very little in the way of a USP, or the average member of the public doesn’t understand what makes you different from the competition - purchases are often driven purely by price.
In this article, we discuss the four methods of customer engagement that we believe are guaranteed to drive your customer retention. Studies show that 91% of consumers are more likely to shop from brands who recognise, remember, and provide them with relevant offers and recommendations. And we believe these suggestions do just that.
Early renewal incentives
The easiest method of retaining your customers is to tempt those on your most valuable contracts into an early renewal. Ask customers to commit to their renewal price three months early, in return for getting three months ‘back’ at the start of their new contract. Yes, you’ll pay out three months' worth of value, but you’ll have secured your customer’s business for an additional two to three years.
The reasoning behind this method is around the perceived value. Best put to use on long-term, high value policies/contracts, your customers see the benefit in receiving the three-month value back as a lump sum, to spend on something of their choice. Your service is a necessary commitment, but that new TV, designer handbag or weekend away might just become reality, with a high value reward in their back pocket.
Pay them back using eCodes from one of our reward platforms, where the action is on them to claim the value. They can swap their code for their free choice of gift cards/eGifts from hundreds of retailers, or, you can select a tailored catalogue of retailers that are relevant to your brand/industry.
The great thing about this solution is that it doesn’t cost you anything in addition to the face value of your reward. Cashback would cost you more in tax and would likely be more difficult to process. With our reward platforms, we can also fulfil the distribution.
It’s an obvious plus point if your customers pay you via direct debit – it’s much easier for customers to allow payments to keep on rolling at renewal if they don’t need to lift a finger.
Monthly payments over the year bring in more money per premium and the bitesize chunks feel more affordable to your customers who might not otherwise be able to purchase your product. Small increases in total renewal price are less likely to phase these customers, as they budget month on month for those payments.
Even those paying annually via direct debit are less likely to shop around. The concept of spending hours researching new suppliers vs paying a small increase in premium is often enough of an incentive to allow auto-renewal to happen.
But take a look at those customers who AREN’T paying via direct debit. It’s no additional hassle at set-up to opt in, so what is it that is stopping them. Is there a reason they’re paying in full, upfront?
What can you offer to incentivise that all-important form fill that makes you just a little bit stickier? The temptation of a low value gift card is all it could take. An instant £20.00 reward for ticking a different box could boost your retention figures through the roof. In fact, studies show that a customer retention increase of just 5%, can result in up to a 95% profit increase.
With our self-serve reward platform, you can buy as many eCodes as you need for single retailer cards. You purchase the eCodes, which you can keep on file until you’re ready send on an ad-hoc basis, every time a customer converts over to direct debit.
Incentive at Renewal
The classic solution – a straightforward exchange. It’s a great retention technique, as your customers experience instant gratification and can associate the value they are receiving to the premium they are paying.
Typically, you’ve probably used cashback as the reward, but this costs more than the reward itself and can be a pain to logistically process. That’s why we offer a range of platforms that make the reward even more instant, far less fiddly and much more cost efficient.
Simply send your recipients a unique code via email and encourage them to redeem. Once they click the link, they can browse through hundreds of retailers until they see the one that’s right for them. And if they’re stuck on what to choose, then there are multi-retailer cards available too.
You can even add the personal touch by including a message or video, leaving your customers in no doubt as to who their loyalty lies with.
Discount platforms to save money
Become more than just a supplier to your customers. Garner some brand advocacy by offering a value-add solution that puts you front of mind on a daily basis.
Our Voucherstore platform allows access to a huge range of discounted eCodes and gift cards from hundreds of household brands. Available to a closed-user group and branded to you, this platform gives you the ultimate tool to becoming part of your customer’s everyday lives. Every time they buy a voucher, they have you to thank for their cost saving. Whether they use their exclusive access for big one-time purchases, or as a method of making the weekly shop a little cheaper, they’ll see the value in staying loyal to you.
What’s in a gesture?
Many essential services have considered whether their customers are able to continue using their products in the intended way, thanks to Coronavirus. Travel insurance isn’t in high demand right now; cars are barely moving beyond a few miles a week.
In use cases like this, we’re seeing a trend in companies making a positive gesture towards their customers, to show them that they care. Whether you’re able to make a gesture like this or not in your industry, it’s important to start thinking about the long-term retention strategy. The gestures we’re seeing will certainly have a bearing on where loyalties lie when we come out the other side of Covid-19.
We’d love to discuss how one of our four outlined strategies in this article could be implemented in your business. We work across every sector to ensure that our clients have effective retention and incentive programmes in place, allowing us to engage with over 20 million of their UK customers every month.
To speak to one of our customer retention experts today, complete the form to your right, or call 020 8080 6740.