Abiola Salami is a performance strategist (CHAMP) providing valuable insights to high-performing professionals, entrepreneurs & politicians.
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Successful businesses thrive on repeat patronage. The best way to guarantee consistent growth is by keeping your existing customer base while scouting for new ones. Emotional intelligence (EI) can help you identify and better understand what attracted your customers to you in the first place so you can continue re-creating such experiences.
It is one thing to acquire customers; it’s another thing to retain them. After you have successfully recruited prospects into your sales funnel—which is from the point of awareness to the point of taking action—you need to develop strategies to ensure customers don’t leave that desired location.
Available data says, “acquiring a new customer can cost five times more than retaining an existing customer. Increasing customer retention by 5% can increase profits from 25-95%. The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.”
That said, retaining customers still requires some work, but most businesses underestimate its importance. There are always rival brands that are competing for your customers' attention and offering similar value, so the quest to keep customers loyal to your brand is an eternal one. The goal of every business is to perpetuate and maximize the lifetime value of each customer, which is the total value that a customer brings to an organization over the course of the business relationship. Understanding and managing the emotions of customers to ensure continuous patronage then becomes a much sought-after skill.
Here are four big EI ideas you can adopt to increase customer retention.
1. Create and offer the most sought-after products.
When you offer an exclusive product or a product that is the most cost-effective for customers, they will naturally stick to your organization. This is usually an innovative product that meets certain widespread demand. Customers tend to be itinerant and nomadic, always looking for the best value for money—but when they are offered products that are superior to others, they will camp there.
As an example, laptops and desktops entered the market to displace typewriters because of convenience and efficiency. If you continuously innovate and reinvent yourself, you won't only attract new clients—you will retain them.
2. Adopt loyalty programs.
Don’t take the continued patronage of your customers for granted. Ensure your customers' loyalty is more by design than by default. Loyalty programs are basically a set of incentives that encourage repeat use or purchases; they come in the form of discounts, rewards, free shipping, member-only access, etc. Customers are human beings; like anyone else they are self-seeking, and when you advance their self-interests, they will continue to perpetuate actions that yield such benefits. Emotional intelligence taps into the innate motivation of people to get them to engage in certain actions that produce desired actions. An affiliate system is also effective in retaining customers because it rewards them for introducing new customers—the key here is that you have to continue being a customer first before enjoying the perks of introducing others.
For example, airlines often have successful loyalty programs. The big idea is to offer juicy perks to customers who fly frequently. Some of these perks for high-mileage customers range from discounts on selected flights, complimentary stays at partner hotels, ticket upgrades (e.g., from economy class to business class), priority luggage delivery, lounge access, etc. These exclusive deals make it very unattractive for their existing customers to switch brands.
3. Offer customized services.
One of the benefits of proper bookkeeping is that you can see the customer spend on your products and services, customers who patronize frequently, customers who have patronized you for the longest time, etc. By using the data, you can better personalize the services you offer to different customers. Data will show the purchasing patterns and consumption habits of customers, thus making it possible to interact with clients in more specific terms. This type of communication shows that you see the client more as a person than a statistic in your business model. One of the greatest emotional needs of human beings is the need to be recognized and treated as important. So by identifying and appropriately categorizing customers, you touch that cord, which is important to driving retention.
Luxury fashion stores understand this very well; they are prompt in identifying the big spenders who splurge frequently. Sometimes such customers in high-end stores get customized shopping cards, customized merch, complimentary wine and free delivery. The same thing applies to certain high-end bars and restaurants; some go as far as permanently reserving tables for their elite customers, making special announcements of their arrival/presence or even offering special car parking privileges.
4. Ensure the active use of feedback.
Customers always have opinions about how they can be better served; ignore these at your own peril. By integrating the feedback of your customers, you further entrench a sense of belonging and ownership—they feel like they have a say. That’s a powerful feeling or emotion that people find hard to forgo; the idea of being at the center of an organization’s plan is priceless. Organizations that seek to retain customers always give their customers a voice, whether it’s a feedback form on a website, social media platforms to rate their products or service, aggregating consensus through surveys, organizing interactive sessions or media parleys, advertising, etc. Whether or not every single piece of feedback is integrated into the production process, the very act of engaging customers shows regard for them—an act usually rewarded by loyalty from the customer.
Ride-hailing services have changed the game forever with the real-time collection of feedback. They have integrated into their apps a rating system that allows users to rate the driving experiences they have. This not only gives the company a sense of how well customers are integrating with their product, but it also helps curb the excesses of drivers while making the customer more powerful. It would be very difficult to leave that system of feedback to use the services of regular taxis that have little or no accountability.
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