The age old saying in business goes something like, it is 10 times more cost efficient to keep a current customer than to get a new customer. But in today’s world of unlimited choices, how can you keep your current customers from going elsewhere? That’s the question I’d like to answer in this post, Part Five of my series entitled “Incentivize Everything!”
The truth is this, if you provide exceptional service, you’re sure to get repeat customers. The majority of people who buy from you will make future decisions based on the experience that that have that first time. If you meet or exceed their expectations, the next time that need comes up, it’s easier for them to go with a company they’ve already done business with than do the research it takes to find someone else. So already, the odds are in your favor, and it’s your business to lose.
However, in competitive industries, it’s more important to find other ways to ensure repeat business. That’s where incentives come in.
Part 2 of this series discussed the notion of offering incentives to first time buyers, in order to attract them away from your competitors. But in this case, what we want to do is show current customers that by sticking with us, they’ll get a better deal than everyone else.
Many companies have loyalty programs, and this is more of a traditional business practice than the other strategies that we’ve discussed in this series. But most companies miss the mark, making large claims to keep customers but offering very little in the way or discounts or special privileges.
Your customers know the value that you offer. They’re more comfortable paying full price than a new customer who may be trying you out for the first time, not so sure of what they’re going to get. So special privileges for people who are loyal to your brand might go a long way.
The airlines who offer strong frequent flier programs are the best example of this in real life. I’ll be loyal to your brand if it means: shorter lines, faster access to customer service, the more I spend – the more I save, add-ons.
If the only incentive to stick around is the fear of the unknown, or the effort it takes to move from one company to another, you’re missing the big picture. Eventually, most consumers will wake up to your competitor’s efforts to lure them away.