In the competitive world of today, where every new day brings forth more business rivals and customized brands, customer retention is no less than a challenge now. The art of attracting customers and making sure that they stay loyal to the brand the business brings forth is called customer retention.
However, in recent times it hasn’t gotten easier. Gone are the days when people had limited options to choose from, and the customer niche happily accepted the available brands for particular services.
Today, from nutrition to gadgets, customization is penetrated at every step of operations management, and with a plethora of options to choose from, making customers stick to one brand is certainly painstaking.
Two decades ago, Sears was the largest retailer across the US, had a variety of products to offer for different income classes and was the only name the public could think of when it came to a one-stop shop. However, today, Sears is 31st when it comes to customer preference and is far behind its competitors like Amazon, Target, and Home Depot, all of which have managed customer retention through peculiar strategies.
Why is customer retention important? The first and foremost is revenue generation and promised profit. The more the customers, the more a business earns and the sooner it covers its expenses.
Similarly, customer retention makes sure new customers are incoming as the old loyal ones keep referring the preferred brands to their friends and families. Hence the power of word of mouth is prevalent in retained customers.
A strong brand identity develops in the market through customer satisfaction. This is because when the same customers repeatedly choose a retail store, they overcome the hype and promotions created by newer competitors in the market. Hence maintaining customer retention is the need of the hour for retail businesses in this competitive business world.
The question now arises; what strategies can be opted for by the retail businesses to make an impact and form a concrete customer base in the global competitive market?
1. Transparent Pricing
When it comes to satisfying customers, it is important to be made sure that they know the value of what they are paying for. For this reason, transparent and justified pricing is very important. When a customer selects a product he makes sure it aligns with his needs and his budget. The prices of products should be provided in detail using tags, with each item explaining how and why a particular rate has been set.
Similarly, prices should be regularly checked and monitored to stay in line with market trends and ahead of competitors. It is important to know that customers switch easily to other brands when they have to pay unfair or unjustified prices.
2. Customization
In this era where communication is almost flawless and has transcended geographical barriers, customers expect the best results and prompt responses to their queries. Retails which have successfully managed one on one communication with their customer base through AI integrated technologies, have retained a larger customer chunk than retailers who operate otherwise.
As per surveys, 49% of US customers choose brands solely dependent on customization offered by the retail, and the extent to which products can be altered as per their demands.
Customers have even reported that certain brands seem to understand their needs and customizing demands more than others, and so they recommend such brands to newer customers increasing the consumer base in the long run.
3. Personalization
Customers are seen to choose retails which offer promising after-sales services, with customer representatives being in contact with the customer base at all times, knowing who needs repair for a particular product, or has general queries to be answered.
Increases customer loyalty in the long run, building stronger connections with the buyers. Consumers should also be informed of every minute changes and offers, to make sure they feel connected to the brand.
This includes follow-up emails and courtesy calls to customers who might be interested to know any new offers or promotions that can be helpful.
4. Loyalty Programs:
Today loyalty programs are one of the most successful strategies opted by retailers to retain maximum customers. Different loyalty programs can be utilized, e.g.:
· Point Based System
According to this, customers earn points on every purchase and can redeem points once they reach a certain level, offering concessions on payments. The higher the points, the higher the concession on payments.
· Non-Monetary Rewards
Customers are not always attracted to monetary incentives, sometimes product-based returns enable a higher number of customers to come back, e.g. regular customers might be offered free samples of a product yet to be launched, and have their feedback recorded accordingly.
· Partnership Among Businesses
Sometimes, retailers can attract customer pools through unique branding and partnerships with other businesses, e.g. Wal-Mart offers return tickets for Malaysia, to customers who visit regularly.
· Shopping Level System
Customers are offered discounts according to the level of shopping they achieve e.g. a level 2 customer might get 30% off on payment while a level 1 customer might get 15% off, with levels changing with the frequency of customers returning for shopping.
· Sample Based
Giving out free samples of related products to loyal customers is another tactic to keep customers hooked, e.g. customers who buy more food items are given related eatery items for free or discounts. This is also called promotional marketing.
5. Efficient Inventory
As clichéd as it sounds, retails with full inventories are always approached and appreciated. Inventories of desired products need to be updated regularly, whereas items not in demand should be swept off the shelves. The reason is that customers prefer retailers offering easy access to the products they want. Similarly, items that are not needed or demanded by customers should be back-shelved.
The question now arises: how can inventory be kept in check? The answer is simple: Digitization of inventory through an inventory software solves all such hassles.
Many successful retailers have attained a strong customer base by stocking up their inventories safely and with full checks through such software. It automatically deletes or adds inventory as per requirement showing which inventory is redundant and which needs immediate selling in case of perishable items.
Particulars like expiry dates, flavors, colors, and sizes, all are stored within a database through this software which can be easily accessed by concerned employees and store managers. On return or exchange of items by the customer, such software can easily relocate which item is wanted in exchange, leading to customer satisfaction and timely purchases.
Conclusion
To conclude, it can be surely said that customer retention is the pioneer of building stronger and longer-lasting businesses. A brand survives solely on the pillars of customer satisfaction, as long-term consumers are the main profit-generating source for any business. In the competitive world of today, where every other brand offers more value and bigger visions to customers, surviving in retail is hard if timely strategies are not implemented. Customers might switch businesses easily and to avoid that customer coming back is to be made sure by instigating prudent policies.