Don’t Get It Confused – Customer Retention Is Not Customer Loyalty
As a customer retention and loyalty expert, I am often asked “what is the difference between retention and loyalty”, which gave me food for thought to write this blog.Everywhere we look we see businesses promise to “improve customer loyalty.” But, I’m often find myself question this. What people mean when they talk about customer loyalty is in fact customer retention, and we shouldn’t get the two confused. Understanding the difference between customer loyalty and customer retention is important to any business and its success. Let me explain further…
Loyalty is growthWhen we talk about customer loyalty and associated programs, we are talking about programs which work to transform a customer’s positive relations with a company. This is the “scratch my back, I’ll scratch yours” promise and, when they are done right, they can have amazing outcomes.
The point of customer loyalty is to grow the habits of a customer. To recognise the right behaviours and focus on the customer becoming more loyal will result in a higher value customer for your business and higher value experience for your customers. Do you see where I’m going with this?
Retention is decline
Customer retention is about safeguarding, rather than growth. It should be focused on a positive indication that this customer is on their way out the door and, let’s face it, no one wants their customers to walk out of their door and not return, right? Do you want to be the reason they leave you and go to a competitor instead?
It’s no longer about growth; it’s knowing what is about to happen to your customer and doing something about it before it is too late!
Customer retention is about education, evaluation and finding the right fit. It’s about the value of the customer experience offered in your business.
Many companies we have worked with previously used price reductions for customer retention but, in our experience, if you do not offer value the results you will receive are only temporary. In most cases, those slicing the prices don’t value the consumer as much as they should. Focusing on education can provide value, making sure they know what you do and how you do it, and why you do it better than your competitors. But, more importantly, if you are not a good fit for your customers they will not want to use your service, or buy your products. It’s that simple!
Customer retention and loyalty are different. If a business relies on its customers to survive and grow, they should have both working in tandem. Without these your business could miss the critical emotive user points resulting in bigger returns and longer-lasting relationships.
Let’s sum it up
Customer retention rate is useful as a measuring stick but it offers no actionable information to help improve your business and its future success.Customer loyalty contains information that enables you to make relevant offers that result in more sales.
What you want is for your business performance to be supported with powerful customer loyalty, and what you get depends upon your willingness and ability to measure and market quantitatively. Most businesses I come across don’t know where to start; they don’t know who their loyal customers are or even what makes their customers loyal. If this sounds familiar, don’t fret!
We are experts who can help you understand who your loyal customers are, what makes you stand out above your competition and how to improve the overall customer experience. Because we are passionate about customer loyalty but equally as passionate to help small businesses grow, we are offering a whopping 50% off our services during the month of January only – meaning, we will undertake a three-month research project for only £995, opposed to our usual price of £1,990
This is an absolute steal! If you are interested in growing your loyal fan base, you should get in contact before this offer ends!
You can book in for a free consultation with one of our experts or telephoning: 0208 798 3186.