Development 4 Managers.com

CustomerRetention

How Many Customers Should You Retain?

Some organizations set customer retention goals that are not realistic, and sometimes dangerous to the organization.

Managers must recognize that you won't be able to keep every customer, nor do you want to. Some customers will change or simply won't be a good match for your offering or for your strategy.

You need to define who your target customer is first, so you focus on that kind of customer, and let the rest go. Otherwise you'll spend (and waste) a lot of time and money on the wrong group.

One approach is to identify your best customers first. What defines a best customer is up to you. You could use RFM as a model. This means, you could define your best people as those who have purchased recently, frequently and those who have spent the most.

Next, with a list of best customers in hand, get a hold of them. Talk to them and find out why they stick around. They are the ones that will give you insight as to what your Unique Selling Proposition is.

Then use that USP in your marketing and get some quotes from those customers in your marketing. You may want to explore other elements of retention, such as memberships and subscriptions.

You could also develop levels of membership, reserving the best benefits and rewards only for your best customers.

Finally, keep in communication with your very best customers often, never disappear from them.

I would recommend this resource (book): Customer Satisfaction is Worthless, Customer Loyalty is Priceless: How to Make Them Love You, Keep You Coming Back, and Tell Everyone They Know by Jeffrey Gitomer