10 Dec Retaining Your Customers and Building Brand Loyalty
The rising competition and economic climate has prompted every sector mostly the telecom sector to slash prices in an attempt to win new customers or subscribers and retain existing ones.
However discounting is not the most cost effective strategy for building long-term brand loyalty, knowing your customer and giving them real value is the best way to keep them coming back for long term- relationship. “If you position on price, you’ll always be vulnerable to a low cost operator that squeeze cost more than you can. Consumers are happy to pay a little more for a brand that they believe in, or a product that has carved out a unique selling point in their mind.”
Reducing the price of your products or services can damage your brand by encouraging fickle consumers behaviour, also discounting is lazy terminology for brand marketers. All it will do is give a quick boost. Once you get into that price war, it’s very difficult to go back and ask full price. By trying to bribe consumers to stay is the wrong way to do loyalty marketing because they’ll take the bribe and then leave.
MTN stands out in the mobile market because it has engendered loyalty without resorting to price cutting, by offering MTN premium plus, MTN is giving value to its target audience without damaging its reputation through price-led discounts.
Commoditising your business can be dangerous because you have to retain customer for so long at the agreed price point, always running the risk that they will fall away when try to move them to a higher rate when the offer ends. It get worse if you use this tactic in the FMCG environment because you will drive trial, but not necessarily loyalty.
The key to loyalty is not price but knowing your customer and offering them something that adds value to the individual or organisation. When you start to understand your customers’ need and align your products and services and customer communications to those then you can build up a strong loyalty.
Compiling behavioural data consumers can helps brands understand what drives their interest. Using data help differentiate beyond price by having a value, instead of uniform offers or across the board discounts. You can differentiate beyond price by having a value for money offering that is focused around understanding your customer needs and meeting them, ideally uniquely, against your competitive set at an appropriate price. It will be good to combine transactional metrics from website and social media interactions to get real understanding of your customer.
Responding to customers needs is especially important for brands looking to retain high value customers, and developing strategies to satisfy this demographic can really affect a business’s success in the long term.
Treating customer according to how valuable they are to you should be a mantra for every business. It’s not just about keeping customers; it’s about keeping the right ones. Online channels have become a popular and cost effective way to getting to know customers, however, social media is where brands are now heading to build customer relationship and many now use facebook and twitter as an integral part of their marketing mix. Recently, Coca Cola said they had hit 35 million facebook fan and also Beat FM won the award for the Best use of Social Media in Marketing at the recently held MarketingWorld Awards 2011.
Social media platform provides the perfect place to start a dialogue with consumers and ultimately drives loyalty. Social media channels provide brands with an ideal environment for establishing an ongoing relationship with customers that extends beyond price. When you interact with customers and provide useful or entertaining content, you have an opportunity to move beyond a primary transactional relationship.
When a customer invites you to keep in touch they are not only giving a unspoken endorsement, they offer you a chance to hold their attention and demonstrate your relevance to them.
To truly drive loyalty and retain customers for the long term, brands must go above and beyond price cutting to add value that really resonates with consumers. Getting to know your customer by providing engaging, honest content and using the latest social media platforms, will help build a loyal consumer following that will guard against fickle consumer leapfrogging