How to develop a successful Retention Plan?

Maintaining a customer is between five and fifteen times cheaper than obtaining a new one. Because of this, knowing how to apply retention and loyalty strategies that manage to retain and develop profitable, loyal customers is one of the priorities all executive should have.

Many companies have based their commercial and marketing strategies on obtaining clients in mass market actions that motivate impulse buying. However many of them forget that the true challenge begins only after the customer has made the first purchase.

The Retention Levers:

• Affinity or level of financial commitment the customer has to the company. This is usually measured in number of products purchased, the use of those products or services, and the total expenditure with the company.
• Loyalty or customer loyalty is the share the customer gives the company of all their business and the volatility of that share over time. It is not easy to detect and evaluate the level of customer loyalty. This, however, is a key factor in distinguishing the truly loyal customers from those purchasing deceptively.
• The Risk of Churn. By analysing and understanding the causes as well as the symptoms of customers who have left, we are able to predict and identify those customers who are not loyal and will probably leave us.
• The Customer Value. It is impossible to retain all customers as marketing/sales budgets are not unlimited. Because of this, it is fundamental to proactively choose those customers and segments with which we want to take action and those with which we do not. Choices must to be made.

Multiple Retention Profiles may be found and adequately managing them is fundamental to prevent spending the limited available resources where there is little potential and scarce or zero profit.

Five Step Retention Plan:

1. Identify and measure the level of Affinity, Loyalty, Churn Risk and Value of customers
2. Develop a segmented customer Affinity and Churn Map
3. Prioritize the Valued Customers and develop specific affinity plans 
4.  Identify the customer with Risk of Churn or In the process of leaving and establish a plan to manage the potential churn and churn in process.
5. Decide what commercial channels and efforts will be assigned to each customer.

We design Retention Plans aimed at optimizing sales effectiveness to the specific needs of each customer segment. If you need to develop a successful Retention Plan, we can help you...