As the end of the calendar year draws closer, the all-important sales meeting is just around the corner. Your team is elated, as they've already met the annual sales targets, but as someone leading the Sales function it is your responsibility to set the bar even higher and motivate your salesforce to achieve higher KPIs next year.
Your company's new customer additions may have hit a record high, but your bottom-line has a totally different story to tell. The elephant in the room is the rapidly declining customer retention rates.
As per a study, it costs around five times more to attract a new customer than to retain an existing one. Despite this, most companies have a hawkish focus on customer acquisition, without making retention a priority. Think about the marketing budget spent on getting a customer to walk into your brick-and-mortar store. And, then they are gone... forever. Without a sound customer retention strategy, that's bound to happen.
Your marketing strategy could be attracting prospects like bees to honey but nurturing and retaining existing customers generates a significantly higher RoI. Returning customers are four times more likely to make a purchase from you than new customers. Moreover, the spend per purchase of a returning customer can be significantly higher than of a new one. What does that mean for your bottom-line? Increasing customer retention by just 5% can boost profits by 25% to 95%, says a research by Frederick Reichheld of Bain & Company who is also the creator of Net Promoter System (NPS), a well-established metric to measure customer loyalty.
The strength of your customer base is key to your company's growth and customer stickiness is therefore the most important ingredient in this recipe for success. However, customers today are inundated with choices, which has resulted in the stickiness factor dwindling over the years.
As per a 2018 commissioned study conducted by Forrester on behalf of Adobe, companies that are experience-led have reported 1.7x higher customer retention, 1.9x higher average order value, and 1.6x higher brand awareness. Focusing on building an impeccable customer experience journey therefore will have to be an important focus area for retailers in India.
A personalized reward platform is a great way of turning buyers into repeat customers. We have seen this happening through our own gifting platform called Pine Perks, a personalized and customizable rewards and gifting solution now used by over 600 corporate organizations across banking, insurance, manufacturing, pharmaceutical, FMCG, telecom and other industries.
The advantages of using a personalized reward platform are threefold:
The need of the hour is to choose a reward platform that offers the flexibility of providing personalized rewards to different customers. It will help them reduce churn and build lasting relationships with customers. Since Pine Perks is backed by strong analytics, it is an ideal platform for merchants to garner valuable customer insights and run targeted reward campaigns to increase customer engagement.