Friday, July 30, 2021
Home Industry Insights Customer Retention Is Not (In Fact) Loyalty

Customer Retention Is Not (In Fact) Loyalty

How many times have you heard the sentences: “we need to retain our customers for longer” or “our objective is to reduce the churn rate for x%”. Keeping the clients in our base is something really important, a necessity which makes the difference between keeping your business in the game or declaring bankruptcy.

But let’s see the facts: most of the time, we are so focused on reducing our churn rates, improving the Lifetime Value and finding new alternatives for growing with increasing recurrence, that we don’t even observe a really important point: it’s really necessary to build customer retention. But, there’s a question to ask: are we able to create a loyalty feeling in our customers’ relationships?

You can retain customers for a while,
but they will just be with you until they understand it is a good deal.

Technically you must have your eyes open to the Customer Success KPIs. A good assessment needs to be done weekly. Watching only the results at the end of the month won’t speed a good decision. MRR Churn, Logo Churn, Net Revenue Churn are some metrics for mentoring customer retention. These KPIs will take us to a fidelization way. But, the final indicators don’t show us if this customer is a brand lawyer or not.

Now, let’s think more deeply. If we understand that we have been losing customers, there will probably be common points for a churn request. Considering the product to be expensive, not understanding the real price value or finding a new competitor are some classic questions that I see day by day in the companies. All kinds of reasons come from a common root cause: there’s not enough added value to stay loyal to the company.

To monitor these causes and to anticipate cancellations, the KPIs, for measuring the Health Score, NPS and CSAT notes, besides the research forms will enrich our database. Thus, we will start to create and scan the customer behavior risk and anticipate an eventual churn request. However, we are still talking about retention and not about loyalty.

So, what is loyalty?

Let’s think about a one year contract where the customer needs to pay a great tax if he decides to cancel. If the customer maintains the contract, it will happen only because of the legal reasons, no other reasons. In this case, we are just retaining a client.

In another situation we have the same contract. However, we are delivering excellent service. The customers are happy and understand that the product helps with their problems and the company grows. At this moment, it is not the contract that maintains the customer, but the expected results versus reached results, positive in this case. In this case we are in retention, but creating loyalty too.

Loyalty means going beyond good service. It’s necessary to show the customers that we really care about them, and we want to work and find the best solution ever. All this means not just having a good product, but going beyond the expectations about our promises. We don’t need to have a big investment, just a little sensibility with customers can be a great difference. Take a look in some points:

  • Faster and effective attendance
  • Be really focused to resolve the problems
  • Give your customer a status with solutions that take longer
  • Talk the customer technical language
  • Empathy: their problem is our problem

All these are free of cost for the company and are great weapons to loyalty. The product doesn’t need to be the best in the market, nor the cheapest or the most effective. Loyalty is building a serious and clear relationship. It takes some time to build this. It won’t happen overnight that one customer will defend our brand on social media or will recommend it to another person. However, with some time and a well constructed case, more and more customers will be loyal and will be great brand advocates.

Remember: each and every relationship has a beginning, middle and end. You just need to know for how long this is and what positive results your brand will build during all this history.

RELATED ARTICLES

Use The Post Return Experience To Offset The Cost Of Returns

Use The Post Return Experience To Offset The Cost Of Returns

0
The Post Return Experience phenomenon Returns are a fact of life for retailers. And with online shopping through the roof, the pain will be that...

Shrijay Sheth’s POV on The Common Misunderstanding of What CX is...

0
There is an old saying in the world of business – 'Customer is King'. But I think this needs some tweaking. 'Customer Experience (CX)...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments