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Businesses focused on customer retention will survive an economic downturn

Businesses focused on customer retention will survive an economic downturn

Keeping hold of customers can pose a challenge even at the most economically buoyant of times. As we’re deep into a financial downturn and a cost of living crisis, never has it been more pertinent than now to channel business focus into keeping existing customers happy. Even the best companies, who have highly desirable products or services, will experience a chunk of their client base moving on, but those that prioritise customer retention will be those who, long term, thrive.

The benefit of a loyal and engaged customer base cannot be overstated. The most attached clients purchase from the business repeatedly, often coming back time and time again – and this is prevalent across the majority of industries. The result is that client retention increases the lifetime benefit of a company through increased profits, this rings true even more during tougher times.

There are many examples of excellent customer service pivots during the last few years when lockdowns sent businesses into a tailspin – with those concentrating on this area receiving praise. One great example is amaysim who offered complimentary bonus data during this time and encouraged customers to “stay safe and stay connected”. This latched onto the insight that phones were going to be used more than normal in lieu of physical socialising, and that purse strings were going to be tightened.

 

Eric Alkema - Photo Supplied

Eric Alkema, Associate Director Digital Marketing at amaysim highlights that, “To obtain strong results through customer retention you need to be obsessed with solving customer pain points. Utilising your analytical stack and data team to identify key ‘moments of truth’ in the customer journey.”

“Collaborate with the customer service team on the most common pain points. Map them out and rank them in order of priority. And lastly, but most importantly get feedback from your customers on their prioritised points of contention. The customer will tell you what is not working for them.”

Taking on Eric’s advice, here are just five of the most common themes among customers’ ‘moments of truth’ and how to address them in order to maximise retention during tough times.

  1. The customer wants more for less?

Get in there with them before they start to get demanding, and offer them added value that comes at no or minimal cost to you. An example would be the aforementioned amaysim activity where additional data was given to help with cost savings during lockdowns in 2021.

  1. Are your products or services solving a customer’s immediate needs?

During an economic downturn, people begin to prioritise aspects of their routines. Investigating the products that truly add value. By showing empathy for the situation as well as highlighting why your product or service is valuable is critical for a customer to maintain loyalty to your company.

  1. Do the customers want to leave your service?

Offer a pause in their subscription/rate/plan instead of cancelling it altogether. Customers are more likely to return to their service when they don’t have to repeat the entire onboarding or registration process.

  1. Are the customers time-poor and want quick solutions?

Get back to basics.  Take a look at streamlining your onboarding processes for changes in circumstances (i.e. customers moving to new plans), and think about how you can accelerate the time to complete. You can make an immediate impact here.

  1. Do the customers feel valued?

Start simple and listen to what your clients are saying, establish that feedback loop so you can address moments of possible churn and reiterate your messages. Offer your most loyal customers first looks and trials of new products then use this insight to shape your output. They will feel more valued and you will get unmatched real-world feedback from your ‘biggest fans’.

To summarise, there are so many stats on the impact of a good retention strategy, and acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. This should be a good enough motivator for your business to focus on retention strategies today.

This post is by Guest Contributor: Greg Cullen, Chief Revenue Officer at Pendula

 

Greg Cullen Image Supplied
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