November 2006 - After the Phone Rings

Continuity Customer Retention Tactics

By Shari Altman

Last month, I covered methods for acquiring continuity customers once you’ve identified a concept. But acquisition is only half the battle. The profit from continuity marketing comes from the ability to “acquire once and ship multiple times.” Most marketers lose money acquiring continuity customers, or at best break even. To be profitable at continuity marketing, you must be able to retain customers beyond the initial order.

In simple terms, to improve retention you must: 1) Add or increase the number of tactics that are retention drivers; and 2) reduce or eliminate actions that are retention killers.

Retention drivers are policies or promotion tactics that increase the length of time customers gain meaningful value from retaining their relationship with the marketer. Retention killers have the opposite impact. Assessing whether a policy you are about to implement or a promotion tactic you want to test is a retention driver or killer means putting yourself in your customer’s mindset.

One of the biggest retention drivers is being flexible. Different customers have different needs. Some prefer one payment and others prefer stretching payments out. Some customers want to get shipments monthly, and others prefer every other month. The more you are able to be flexible and let customers determine when they receive their shipment, what components are included and how they pay, the more likely they are to find a combination of those that works for them.

Using the web to your benefit can become a retention driver as well. The low cost of e-mail allows you to notify customers before their next shipment and put them in the driver’s seat about the timing of that shipment, and what it includes.

On the other side of the coin, the biggest retention killer is slow or delayed delivery on the initial or first follow-up shipment. Customers forget, change their mind and in general are given the message that you don’t appreciate their business when you don’t deliver when expected.

The second biggest retention killer is a pricing strategy that creates “sticker shock” on the first follow-up shipment. For example, you might offer an item that sells for $35, for $10 when the customer signs up for continuity, then bill $35 for each future shipment. This doesn’t mean you can’t discount to acquire continuity customers, just be careful that difference in price from initial offer to follow-up shipments isn’t too dramatic.

And don’t forget to thank continuity customers for their business-early and often. A sure-fire way to kill retention is not appreciating someone’s business. Continuity customers are “golden”; they are not average buyers. So long as you remember that, and treat them with the respect and attention they deserve, they will reward you by staying around, and growing your profits.

Shari Altman is president of Altman Dedicated Direct, a DR marketing consultancy based in Rural Hall, N.C. She can be reached at (336) 969-9538, or via e-mail at [email protected].


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