A retention program is a specific set of activities or initiatives a company takes to retain its customers. A retention program helps to increase customer value and bring customers into doing repeat business with the company.
Why Do You Need a Retention Program?
Businesses can be too caught up in acquiring new customers that they forget the importance of retaining the customers they already have. Of course, for new businesses with no customers, customer acquisition is needed. But once they have a customer base, retaining customers and making them come back is actually much more profitable, resulting in a greater ROI at 5 – 25 times less cost!
Now that you’ve understood the importance of a retention program, you might be wondering what your company needs to start one. Well, here are some important elements to make a successful retention program.
What Should A Retention Program Have?
- Customer loyalty program
Your customers’ loyalty needs to be rewarded. One of the most important elements of a retention program is customer loyalty, where customers are rewarded in every stage of their journey. You can reward them the more they shop from you, be it with points that can later be exchanged with vouchers or free items, direct discounts, and many more. Rewards are always interesting to customers because they enjoy an experience beyond just buying your products or services.
- Gamification and referral feature
Your retention program needs to be engaging enough so that customers will be motivated to be actively involved in it. Using gamifications can help. For example, you can gamify their point collecting experience by using membership levelling or unlocking certain benefits. Aside from that, adding a referral program is also a clever way to bring even more customers to sign up on your retention program. Your existing customers will be encouraged to refer a friend in exchange for rewards, and their friend will likely sign up too. This works as a low-cost promotion strategy because these days, people trust recommendations from friends more than giant ads or influencers.
- Personalized communication
There is no one-size-fits-all in retention strategies. Customers need to be engaged based on their different demographics, preferences, visit frequencies, and other determining factors. A reward that works for Customer A will not always be attractive to Customer B. Therefore, you need to reach out to customers with the right incentive at the right time, which brings us full circle to the last but definitely equally important element: understanding your customer data.
- Customer data insights
Your customer base is not a singular, homogeneous entity. Likewise, companies should start seeing their customers as individuals with different needs, preferences, and behaviors. Your retention program will not likely work unless you capture and leverage your customers’ data into useful insights that you can use to create better retention strategies. Thus, your retention program needs to be integrated with a reliable analytics platform that can tell you everything from the customers' age and gender, to their last visit to your store and what they buy.
In an era where customers can easily switch to any brands that offer them the most benefits and engaging experience, starting your own retention program is essential to retain customers better. Your retention program needs to be more than just a traditional customer loyalty program, but one that incorporates loyalty, rewards, personalized communication, and data analytics altogether.
TADA has helped many businesses launch their retention program to lock in customers and sustain their business. If you are a business looking to start one, look no further because we are happy to help. Contact us today!