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Building a successful business among fierce competition has become extremely challenging these days, and business owners have come to the harsh realisation that it is not enough to simply create creative promotions and lower prices. While technology has added a touch of convenience to everything it touches, it has also created an informed society full of consumers who realise they can choose where they buy products and services. Due to the shortage of loyal customers, business owners are reallocating their resources to focus on developing a quality customer retention strategy in Singapore to help regain that competitive advantage.
A study of numerous industries conducted by Bain & Company revealed that if companies design and implement a successful customer retention strategy that delivers a 5% increase, profitability could increase by up to 95%. Other customer loyalty studies have revealed that a customer’s value increases over time because they become more efficient users of the products and services purchased, have less impact on operating costs and increase customer acquisition through word of mouth. More importantly, existing customers are much less concerned with the cost of products and services and are less likely to be persuaded by competition.
Because companies come in all shapes and sizes, it is fortunate that the development of a valuable customer retention strategy in Singapore does not have to be too complex, expensive or time-consuming. The key is to take the time to understand where you can best apply the commitment and the investment and get the necessary tools to make it work. Also, it is just as important for business owners to understand that efforts should be a company-wide initiative since all aspects of the business will be affected. The best segmentation, creative messaging or perfectly executed promotion will generate few results if the companies do not work together to add value. Creating a solid foundation will lead to greater customer loyalty and commercial profitability.
To develop an effective customer retention strategy, it is imperative that companies connect with their existing customers and ask the following questions: 1) What existing customers do we want to keep? 2) What products or services do these customers consider valuable? 3) What incentives, motivation programs will create a positive response from these clients? Developing a strategy based on information that provides a unique view of customer behaviour is the first step towards profitability.
The final ingredient, the most successful customer retention program, is also the most ignored by many companies, which is realigning the customer service function to support the company’s efforts by improving the customer experience. If companies skip this step and eliminate human interaction from their retention efforts, their potential customers will feel treated as a transaction and quickly take their business to the competition. Companies must ensure that the rewards offered to their existing customer base goes hand in hand with effective communication along with superior customer service efforts that focus on building the relationship.
In short, in today’s vast market, a company is more likely to survive when business owners focus on efforts that emphasize improving the product and service offerings that motivate their current customers. A loyal customer is a long-term solution to maintaining profitability and integrating a successful customer retention strategy in Singapore into business operations will help business owners stand out from their competitors.
