In the current pandemic situation, the key question is how to maintain loyalty? Business is focussing on increasing discounts which results in margin drops.
Loyalty is nothing but bonding. It does magic. Winning it back will be a battle for every business. Even in tough times, loyalty programs help with customer retention. For e.g., Macy’s gets 46% of revenue from 9% of engaged customers. If you move from 9% to 1% increase, there is a higher possibility of your revenue to 51%. This kind of leverage impact, which the loyalty program has, without even affecting the real margins. Harvard Business Review says a 5% increase in retention helps to get a 50% increase in profit.Convert customer programs into loyalty promotions as it results in more sales.
Harvard business researchers made an attempt to apply retention programs to analyze customer lifecycles in various sectors of the E-Commerce space.This also included books , electronics , groceries etc and figured out that the concept of retention works really well. Losses were followed by profits gradually once customers decided to stick to the product or organization.
Constantly studying the customers & interacting with them, using several digital channels, cross-selling to provide the best service, communication, and collaboration, end-user & cybersecurity are areas to focus to enhance customer engagement. Instead of discounts, offer points in the customer spending that will make the customers keep coming again and again. Above are the few tips for an effective retention program. With this focus, the business can capitalize on the charm by continually captivating the customers. Customers have always ruled the market in a way which cannot be ignored by any organization that strives to exist.The world is moving towards high customer satisfaction with higher profit targets which can only be achieved by a collaborative approach.Hence , the concept of customer retention and engagement steps in.