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| Jonathan Clark and David Ford from Bright Blue Day |
I have been thinking about the brands we love and how to improve customer retention. Let me tell you a couple of stories.
Three years ago, I took delivery of a car and on the way home it literally died. I did not see the car again for four months. However, the gentleman who looked after my “case” was exceptional. He updated me regularly, kept me totally informed on progress and made a bad situation OK. The car firm also sent me a range of well thought-out sorry gifts that were actually appropriate and of suitable value. I am now very loyal to this brand and I have a good opinion of them.
The other day, my wife and I were chatting about Clark Plc expenditure. We had decided to tighten the belt in a few areas and Sky TV was first on the list. With three kids of different ages, all of us have different viewing requirements ranging from football, Disney and South Park to Grey’s Anatomy. We currently have the full Sky package. It was going to be challenging to cut back.
In fact, my wife had a very, very good experience with Sky TV. The man on the phone listened and came up with a superb idea that was appropriate to the situation and our request. It was surprising and well delivered. To be frank I think we were expecting a bit of a challenge. It was the opposite. So now I have a great opinion of Sky, Clark Plc has the viewing requirements sorted and I will tell people about the positive experience.
So this got me thinking about two things: why we become loyal to certain brands and how businesses can improve customer retention.
Rewarding loyalty
In order to establish a loyalty scheme of any kind we need to establish who it is we actually want to reward and what it is we want to reward them for. If our most valuable customers are 100 per cent loyal to us then do we give them rewards just for being there, or do we concentrate on making the less valuable customers more valuable? We must ensure that we are adding value to our business and not simply creating a discount scheme.
Defining our objectives needs to be the first step – are we looking to reward behaviours that are good for our business, such as a customer spending more within a certain time frame, for instance?
We then need to understand our audience segments. Customers are all different and treating them as one entity means that we may be missing the main motivational factors for some of them.
After we have segmented the audience we need to look at who is the most valuable to us and why – is it the segment that makes up the highest proportion of our base? Those who spend the most? Those who are the least hassle? Or those who we feel we might be in danger of losing soon? How do these customers stack up against our objectives?
Having understood who our customers are, we need to understand their motivations – this allows us to be relevant. What do they value most?
We are a business, so we also need to understand our own motivations – what would we like our customers to do? Spend more? Stay with us long-term? Again, we need to look at this against our objectives.
Adding all this up we can see who we should be targeting, what we want to encourage them to do and what is going to motivate them. Our aim is to identify positive behaviours we want to reward and habits we can seek to change in order to make our business more profitable.
In an environment where winning new customers will get harder, it is more vital then ever before that we cherish our current customers.
Some are happy, some are apathetic and some may be disappointed. As spring approaches it would be wise to look over your customer base and reward them, tackling any issues with empathy and understanding. We do long for loyalty from them; let’s give them some reasons to love us and importantly to tell their friends and associates about the great experience they have had with you.
Jonathan Clark is an expert contributor to Marketing Donut and the executive chairman of Bright Blue Day.
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