To increase customer loyalty in a highly competitive market.
Building customer loyalty is critical to the success of any business. With a limited budget, we developed a very simple yet strong customer retention program. This program focussed on reassuring existing customers that they had made the right purchase decision to prevent them from switching to an alternative brand at the end of their contract.
We first reviewed the customer life cycle to better understand why and at what point some customers were defecting to competitors. We then drilled down further and completed a combination of both qualitative and quantitative market research within the existing customer base to truly understand their opinion of the organisation and its products/services.
We also conducted some qualitative research with previous customers that had defected to truly understand why they had left.
Once we understood this key background information, we were then able to develop an informed and targeted retention strategy to address many of the areas identified as ‘triggers for defection.’
It was identified that the majority of customers were committed to the brand until 12 months prior to the expiration of their contract.
We also discovered that it was during the final year of their contract that customers started to shop around and look to competitors for a better deal – this was the ‘high risk’ stage, when clients were most likely to decide whether to defect or not.
Therefore, we introduced a direct marketing campaign targeting high risk customers. A calendar was established within the customer relationship database to ensure that the ‘at risk’ customers were identified prior to potential defection.
A customer retention program was developed including a series of direct marketing campaigns to reiterate the brand attributes and unique points of difference. Additionally, the mailout of a branded gift specifically timed for delivery at the ‘high risk’ point in the relationship was created.
This program also provided the sales representatives with the opportunity to follow up with an appointment to review the customers’ business needs and ensure that the products and services not only met their needs for now but were also able to future proof their business in a highly competitive industry.
This strategy was viewed as a huge success. The customer retention rate increased to 98% (the global target was 92%).