What are you doing to make sure your customers stick with you?
“It’s easier to keep hold of the customers you have, than to acquire new ones” – so goes the old marketing adage, almost certainly recounted by an industry stalwart as he or she sagely strokes their chin…
Whilst it’s probably true for many businesses, there are plenty more that find keeping hold of their customers in a highly competitive marketplace is a huge challenge.
Take mobile phone contract providers, or insurance providers, utility companies or gyms. In fact, take any business with a contract model. Once they’ve sold their product or service to a customer there’s not much reason for them to get in touch again, until it’s time to renew their policy or contract.
Now you might think “what’s the issue with that?” Get ‘em. Lock ‘em in. Watch your profits soar right? Well, maybe. But it’s a bit short sighted. Consider this. The diagram below shows the classic engagement curve.
You can see that at the start and end of a relationship customers are highly engaged. At the start they’re excited about the new product, or actively reviewing policies and small print. And towards the end they’re back in the same mind set, getting excited again or searching for a new policy or contract.
What the diagram reveals is that there’s a huge slice of a contract based relationship where customers are completely unengaged; their device doesn’t seem so new and shiny any more, they’ve probably already forgotten who the home or car insurance is with, and the gym membership? Well, having skipped it in favour of drinks yet again, that’s just something causing guilt and resentment in equal measures.
The bad news for subscription businesses is that the number of people ‘sticking around’ is dramatically falling. A recession, austerity and now Brexit causing uncertainty, the game is up. We’ve had the best part of a decade where customers are being hammered with the message “shop around. There’s always a better deal”.
So, how do you make sure that when renewal time comes, your customers consider you, when they’ve been trained to look around? Well you could give them an unbelievable offer or incentive, but that’s going to cost you. Plus, you don’t want to get a reputation as a business that discounts.
A far more cost-effective method is to use eCRM to get sticky. Sticky Marketing means engaging with your customers throughout the life cycle of their contract with regular ‘In Life’ communications. And that doesn’t mean solely selling them more stuff (although you can use it as an up or cross sell opportunity). It’s about adding value to the relationship, offering tips and timely advice so that when renewal time comes, your business is in their mind. We’re not talking out and out brand love here. But if you’ve done a good job, you’ll be front of mind. And sometimes that’s all it takes.
We’ve helped the likes of Samsung, Endsleigh, Hiscox, NFU Mutual, Bank of Ireland and Cornhill build close relationships with their customers and reduce attrition with ‘In Life’ programmes.
If you’d like to have a chat about ‘In Life’ programmes and how they could help you retain your customers get in touch with Ian Reeves. We’ll be happy to help your business get sticky.