According to MarketWatch, 43% of businesses were temporarily closed. Plus, the global economy suffered a devastating loss of about $8....
According to MarketWatch, 43% of businesses were temporarily closed. Plus, the global economy suffered a devastating loss of about $8.5 trillion amid the COVID-19 pandemic. Thousands of companies lost millions of customers. Uncountable business entities went bankrupt and lost significant market shares. Global businesses face the most deteriorating financial challenges in decades. No one saw such an economic decline in contemporary times since the financial crises of 2008.
Apart from the pandemic, there can be several other reasons why a business loses its customer base. However, as the world has shown recovery from the COVID pandemic, companies strive to recapture their customers and market share. However, it is not always as simple as it might seem. Once someone has lost a business relationship with a single entity, they’re in free waters now. The modern-day cut-throat competition makes it difficult for a business to regain its old customer base. There are dozens of market players providing a comparable market offering to capture them.
Now comes your competitive strategies. Reentering a market and targeting the same customer base requires a properly pre-planned business strategy. Therefore, this article highlights some helpful strategies for businesses to regain customers.
Utilize Customer Lifetime Value (CLV) Analysis
Customer Lifetime Value (CLV) refers to the total value in financial terms a customer drives for business in its entire relationship with it. This analysis provides valuable insights into existing customers, telling a business about its average CLV to set targets accordingly. Additionally, it saves companies from wasting resources on acquiring customers that aren’t profitable.
However, conducting a CLV analysis is not that easy. It requires proper financial and accounting acumen as you’ve to ensure that you regain and retain customers with high lifetime value. Therefore, as an entrepreneur, you must develop your financial skills to calculate CLV, customer switching costs, and other metrics. But how can you build such skills and knowledge when you’ve to manage your business 24/7. Fortunately, you can opt for online learning mediums. For instance, you can pursue an online master of accounting to master the art of financial management for rapid business development. It will instill essential financial and accounting skills crucial for analyzing customers and industry trends.
Customers with higher CLV should be your first target. No business would want to lose its loyal customers permanently. Therefore, this segment will be the first interest group a company would be interested in regaining. CLV will tell a business about the remaining valuable lifetime of a customer for a business. It will provide a comprehensive view of the current customer base and the business potential to cater to the overall customer base. It will also help to streamline marketing efforts.
Incorporate Contemporary Channel Integration
In the year 2020, 18% of total retail sales were through e-commerce. It tells us about the vastly expanding horizon of online business platforms. Most customers switch or choose another company because of the ease provided by these channel modifications. Traditional business practices are rapidly driving out of the modern markets. For remaining competitive, your business must adopt these latest channel innovations.
Similarly, customers prefer easily accessible payment options. According to a survey by Finances Online, 55% of customers used a bank card for a purchase in 2020. Similarly, 27% of consumers paid through online payment gateways like PayPal. Marketing is also not behind in these modern-day gimmicks. The merging of marketing and information technology has produced solutions like digital marketing and geo-fencing.
In short, all these different channels in various business functions have become inevitable for customer attraction. Competitors are using these features as an added Unique Selling Point (USP). Businesses lose a customer when they fail to compete in these channels. Therefore, integrate these channels into your business operations, and you will regain your customer base quickly.
Innovate and Update your Market Offerings
According to PWC research, 86% of consumers are willing to pay more for innovative products that can drive a better customer experience for them. Innovating and updating your current market offering keeps your customers engaged and loyal to your products/services. The degree of innovation depends on your market offerings. One of the biggest reasons your current customers leave you is because your products/services become outdated.
You can only create loyal customers for your offering through customer-oriented and timely upgrades. Apple is the best example of this scenario. Apple’s constant upgrades have created an ecosystem that even their older customers have inclined back towards them. Customers leave a company because of various problems. Continuous upgrades and innovative additions to your products can resolve those problems and attract the lost customer base.
Moreover, innovation helps you to create positive word of mouth and sustain your product’s life cycle. It enables a business to understand and manage the Product Life Cycle (PLC) better. You will be able to identify the early adaptors and transform them into a constant majority. Your product decline stage will become less steep and harmful. Timely updates will revitalize your products and lessen the market shocks as they enter the decline stage.
Final Thoughts
Intense competition, restricted market width, and high technology reliance have made customer retention extremely complex. Now a business must invest exclusive efforts in customer relationship management to ensure longer customer loyalty. The switching cost has radically reduced, and customers can readily switch to other value-adding options. You must incorporate a precise plan and strategize your efforts to ensure you don’t lose customers. If you lose them, you must have all the contemporary gimmicks below your belt to regain them.
