Here are a few ways to get the most out of your research and encourage your customers to keep coming back for more!
Understanding overall drivers of customer loyalty
To understand the overall drivers of customer loyalty, retention research should include both current customers and lapsed customers. Lapsed customers are often hard to reach but the investment is necessary.
Current customers are by definition positive about the brand or product. Their input alone is not enough to understand the key drivers of loyalty. Talking to lapsed customers helps identify the elements of your product or service that cause switching. Looking at the difference in results between current and lapsed customers is key to identifying where to focus resources to improve loyalty. For example, do changes need to be made in your product, service, or price?
Perhaps the issue is not your product or service. Looking at differences in demographics, behaviors, and attitudes between current and lapsed customers may reveal that lapsed users have lower income, are very price sensitive, are not benefit driven, and shop frequently. There may be nothing wrong with your product or service. Your sales force may be targeting and recruiting the wrong customers, customers who are by nature not likely to stay with your brand.
Understanding loyalty among the most profitable customers
The research, if designed properly, can help you identify how to increase loyalty among your most profitable customers. By talking to customer segments most important to the business, results can indicate how differentiated products, marketing, or services can improve loyalty with the most profitable customers.
For example, prior to the research, identify your high, medium, and low value customers. Make sure the research includes a sample of all three groups. Design the survey to help you understand if there are differences in levels of satisfaction, where, and why. You may choose to map the customer experience through customer journey mapping. This will identify where and what improvements would make the largest difference in loyalty among the highest value customer. Management can then allocate resources to retain the most profitable customers.
Or, prior to the research, identify your new, medium tenure, and longer tenure customers. Include a sample of all three groups. Compare satisfaction between groups. Use the research to find out when the level of satisfaction is the lowest and the likelihood of switching the highest and why. Educate your marketing and sales team to identify critical moments in a customer life cycle and when to commit more resources to which activities.
If the research results show that long tenure customers are less satisfied, additional data might reveal these customers to have higher income, buy your product or services with greater frequency, and do not feel like they are valued by the company. Losing these customers can have a negative impact on your bottom line. Results may also show longer tenure customers are more demanding, expect higher service levels or more discounts in reward for loyalty. Perhaps they get frustrated about poor response time when they call with a problem. This information can be very useful to map out a specific action plan to improve satisfaction of your most profitable segment.
When doing your next customer retention research, think and plan carefully about which customers you want to talk to. Make sure the research is designed to look at specific segments, identify differences in satisfaction, and understand differences in attitudes and behaviors. This way, the results will generate actionable insights that lead to more profitable ways to improve customer loyalty and retention.
MMR Strategy Group