Brands need to reach out or lose out

Quinton Luck, managing director of Arc

Even during ‘normal’ times, a strong focus on CRM is crucial. Take the leaky bucket theory for example. This concept suggests that brands are always losing customers so, to maintain share, they must win an equal number of new customers to keep the bucket full.

“However, in a time of crisis, customers are more focused on evaluating the value they get from their purchased products and this often results in them ending their relationship with a business or moving onto a competitor,” explains Luck. “What this means is that you could lose customers at a higher rate than usual, without being able to replace them fast enough. So, why not focus on the customers you have and show them your value?”

In most cases the better value customers think they are moving on to doesn’t often turn out the way they’d planned. So why would so many businesses out there still rather spend the bulk of their marketing budget on acquisition in an effort to top up the bucket rather than trying to retain their existing customer base – which is more often cost-effective and easier to do?

“As an example,” says Luck, “last month, I drove past a billboard with an acquisition advert from a brand I have had a relationship for over 10 years. I realised I couldn’t remember when they last spoke directly to me. I cancelled my relationship with them the very next day, and I know there are many more customers just like me.”

So, what kind of cost-effective and agile CRM activities could businesses use to help them retain customers?

Here are Luck’s top tips:

1. Send out a small, yet relevant value-add as a thank you for their custom. This could be a voucher, free product or discount (without a minimum spend please!)
   
2. People actually love to be in the know – therefore make them aware of the other products you sell (cross-sell) or update them as to where your business or brand is going and how this can benefit them in the short term.
   
3. Utilise the customer data you have to provide a better overall experience for them. Think of things like home delivery, added online services or automating basic queries with the use of chatbots.
   
4. Ask for feedback and act on it.
   
5. Lastly, one of the most forgotten, yet most powerful actions any business can take to drive retention is to pick up the phone. How many CEOs or CMOs call a handful of their customers daily just to ask how they’re doing and if there’s anything else they could do to improve their experience. The positive sentiment on your customer base is incredible.
   

Luck concludes, when you’re planning your next marketing activity, whatever you do, don’t forget to feed the bird that’s already in your hand.