Customer Retention: Retailers Guide to Repeat Business

What is customer retention?

Customer retention is a key metric for retail stores because it can be used to measure the health of your business. Customer retention is the number of existing customers who return to make another purchase within a given time period and decrease your churn rate (or customers who discontinue purchasing your products and services).

If your current customers are willing to make repeat purchases, you are less likely to lose money acquiring new customers. This is especially important for businesses that rely on repeat customers as they will not have to continually spend money on attracting new customers.

According to the Harvard Business Review, increasing customer retention rates by 5% increases profitability by 25%-95%. The reason for this is simple: it is far more expensive to acquire new customers than to retain existing ones.

Some companies have a customer retention rate of over 80-90%. You can retain customers by focusing on customer service, keeping your prices competitive, and making your products better.

What are some ways to increase customer retention?

The first step in increasing customer retention is to identify the specific needs and wants of your customers, what they value about you and your product and service, and what is most important to them.

1. Customer Loyalty Programs

Customer loyalty programs are used by companies to reward their customers for repeated business. Customers are given the opportunity to join these programs by providing personal information to the company in exchange for some sort of reward or incentive.

The reward could be in the form of discounts on future purchases or simply free products (gifts) and services.

A loyalty program is a way to build a stronger relationship with customers, and it could be one of the best ways to gain a competitive advantage. Loyalty programs have proven to be popular with both consumers and businesses, and their popularity continues to increase.

2. Sales and discounts

People prefer to purchase goods or services at a lower price, or at least think they are. Discounts are reductions in the price of a product or service, and these are generally offered to customers in specific circumstances. Some of the most common discounts include:

Initial, final, cash, early payment, pre-payment, account, student, senior, seasonal, holiday, military, volume, extra, percentage, flat, corporate, promotional, etc.

3. New product development

Product development is a broad term that covers the entire lifecycle of a product from conception to production, and even after it is on the market. This includes the funding, research and development, design, development, manufacturing, distribution, marketing, and sales of a product.

It involves three phases: the conceptualization phase, the design phase, and the launch phase.

The conceptualization phase of the design process is the period of time when the design team determines the nature of the new product. It is during this phase that the design team decides what type of product to design, what its characteristics will be, and how it compares to the competition. This phase is also when the design team decides upon the vocabulary and language of the product.

The design phase refers to the stage of the NPD process that determines the specifications of the new product. The goal of the NPD design phase is to produce a design for the new product that meets the needs of the targeted customer. For example, the NPD design phase may specify the features of the new product, the materials to be used to build the product, the product’s assembly method, the manufacturing process, and the logistics for the delivery of the product to the consumer.

The launch phase is the time period when a new product is first introduced to the market. A company’s goal during the launch phase is to create awareness and demand for the product. It is a critical stage in the product lifecycle and requires the coordinated efforts of product management, marketing, sales, and distribution.

Product development is a systematic and holistic approach to new product introduction and is concerned with ensuring that the new product is introduced to the market at the right time, with the right features, at the right price, and with the right level of quality. Successful development of a product requires the integration of product functions and the coordination of all activities in the new product development (NPD) process.

Conclusion

Customer retention is one of the most important aspects of customer service. A loyal customer is willing to spend more money, stay longer with your company, and is also likely to refer your business to others. If you can retain customers, you can have a long-term relationship with them and they will help you build your business.

By having a POS system in place that handles discounts, loyalty programs, and new product developments with complexity and flexibility, you ensure better retention and repeat business from your loyal customer base.

By POS Highway Staff | July 24th, 2023 | Retail Marketing | 0 Comments

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