I first read the term ‘Retention Marketing’ in an article in a marketing journal at University and dismissed it immediately as one of the new terms we marketers come up with. It was for an assignment and I did not pay it a second more attention than was needed to write a passable term paper.
I heard it next at a meeting in office, about two years later. And was promptly dumbstruck by how important it now seemed.
Munch on this –
1. Repeat customers spend 33% more than new customers.
2. Referrals among repeat customers are 107% greater than non-customers.
3. It costs 6 times more to sell something to a prospect than to sell that same thing to a customer. And of course, the one stat that was drilled into my head so many times during my brief stint in retail.
4. 80% of your profits come from 20% of your customers.
If you are among those who rely on instinct and not so much on data, the fact that it will cost much more to find a new customer than to retain an existing one is just common sense.
I experienced this firsthand when after the exhilarating first few months of pulling in new customers, we suddenly had to contend with churn. I realized that even when customers are using your product enthusiastically and find no fault with it, they will still immediately switch when they see something even remotely better as an offering. Of course, my more experienced colleagues knew this; it is the major advantage of the SaaS model.
And this is why as product marketers, we have to keep our brand in the minds of our customers. The recall has to established, the emotional attachment has to be drilled into minds and hearts. Most importantly, no hint of a reason, however far fetched should be given to the users to think about switching.
Here’s a list of five things you can do –
Push your content
Keep reminding your customer about the product he’s using. Send him newsletters, put him on a blog mailing list. Keep popping up in his attention span in a way that is not obtrusive but makes him feel he’s using something made by committed people. Do not let the customer forget you. That’s where the trouble begins.Reach-out
Call your customers every once in a while; institute a process for the same. Write a case study or a blog post from what they tell you and put it up. This will feed into your content, and give your customer something to show others as well. This is precious – never underestimate the value of making your customer feel good.Listen to product suggestions
When your customers have sensible suggestions for your product and if the suggestions are feasible, implement them. And once you have, tell him & the world what you did. This has a two pronged effect. Because any suggestion an active customer makes is bound to make sense, it’ll be good for the product. Two is that the customer will also be reassured that there are people listening. This customer will never leave you.Focus on high risk customers
Look for customers who are suddenly using your product less or aren’t using it at all or have suddenly downgraded from a higher plan. These are the ones who are on the ‘endangered species‘ list; they may soon decide to go extinct. Engage with them, call them up, do something special for them, give them some freebies, anything. Come up with something that makes them start using your product again.Actively up-sell
This is something a lot of amazing companies can fail at. It is quite a common misconception that ‘good‘ companies don’t up-sell. Some important person once said that if you don’t up sell to your customers, you are cheating them of something. I agree. They could be using your product so much better if you do up-sell, and customers, would never think of leaving. Give your product that advantage.
Keep your customers happy and in doing so, keep them with you.
Source for stats:
1. http://marketing.about.com/
2. http://marketing.about.com/