Whether you are a sole trade, or you are a public company; there is almost always concerns raised over the retention of customers in your business.
I've found that whenever business owners see customers go, they aren't fully inclined to understand the purpose of why they have left. Fixing this comes in multiple steps, and to correctly execute the delivery will take practice. Here are three steps to assisting your practice.
When you attain a customer base, you open their eyes to all of your available products. When you think about it, with retention, this is very similar. Only in this case, what you are opening the customers' eyes to is the purpose of staying involved with the business, and to not leave.
Figuring out how to create this methodology of exposure in retention can be dependent on what industry the business is in. However, take a retail clothing store for instance, the customer could be shown a new product range which would suit their interests. This would create a feeling of involvement and alignment between the business and the customer; therefore, retaining their business.
If you are a business owner and you see the word 'incentive', probably the first thing you picture is a big $ sign. The allusion of an incentive is that it carries the messages of discounts, loss leader pricing, coupons etc - which all cost the business money. If you think about an incentive more openly however, you will see that the general conception fits as well. For example, take that same retail clothing store as mentioned above, and in this case you build a stronger relationship between the business and customer, and then they would feel that they are comfortable with the business's people, and the business itself.
It is crucial that the business does not take advantage of an incentive process over an exposure process, as it will end up failing in the long-run. This is why both methods are necessary to create a sustainable retention plan with your customer base.
Having a reward system is almost as easy as it sounds, to the extent that an overuse of rewards (discounts, mark-downs) will financially diminish profit levels, but keep your customer base. Making sure that customers do not feel that there is 'always a sale' is crucial in this part of the retention plan. If a business was to continually promote sale after sale, their brand image would look terrible, and their loyal customers would feel threatened by the lowered image. Subsequently, what may occur through consistent rewards also, is the reliance on other periods to keep the revenue financially stable.
Remaining versatile with your reward choices is a sustainable business practice, and choosing the right times, customers, and products also has to be considered. Recommendations that suggest that there are not enough sales is also detrimental, as loyal customers will feel as if there is no return on the investment of their loyalty.
All in all, a business owner must consider all three integral parts - exposure, incentive and reward - in order to retain customers for the business. Failure to execute a successful retention plan will inevitably create a harder role in acquiring customers within the long-run.