Why aren’t my customers coming back?

Retailers are grappling with the evolution of customer behaviour and rising expectations, losing margin by being trapped in a price war or wasting their marketing budget acquiring customers who probably won’t come back.

The price war – win on price, you lose on price

Let’s think back to how you first attracted the customer to your business. Was it a ‘sale’ campaign that captured their attention? If the answer is yes, there will be trouble ahead – we guarantee it. You cannot buy loyalty, it must be earned. If a customer was so easily swayed to you because you because of price, they will be just as easily swayed away – it doesn’t matter how exceptional the service or experience was. Bargain hunters are only loyal to the price – not the brand. 

Why customer relevancy matters

Don’t waste your efforts trying to continue the wrong conversation at the wrong time with the wrong customers. Target the customers you can continue to deliver value to. Think of the reasons why they would shop with you vs others and why they wouldn’t shop with you. Assess the likelihood of the customer coming back. 

Customer segmentation is so important in helping you determine which of your customers you should be focusing your efforts on. Customology helps businesses learn exactly who these customers are by conducting a growth analysis – this approach identifies how revenue went from A to B over a period of time through the lens of different customer groups. 

The customer journey – beyond path to purchase

Too many organisations are spending their efforts focusing on the path to purchase journey – using discounts and offers to attract new customers. As we’ve already discussed, this isn’t the most effective strategy.

80% of your future profits will come from just 20% of your existing customers¹. Existing being the key word here! How much time and budget does your business invest in the path to re-purchase? 

The below graphic represents our view of the path to re-purchase. There are 4 R’s which are particularly important:

Recognise your customer – thank them for shopping with you, for choosing you above others

Research – ask the customer what they are interested in, curate the messaging for them

Reward – reward the behaviour you want to influence

Remind – remind your customers the benefits of your value proposition

Good price and good service are a given – customers already expect this as a minimum. You can’t buy loyalty – but you can influence it. Undertake an effective customer segmentation analysis to identify the sales growth opportunities for your business.

Continue the conversation with the customer, and treat them as an individual. Focus on the path to re-purchase to drive engagement and customer loyalty. 

Customology are specialists in customer lifecycle management. Contact a Customologist today on 07 3902 7700 or hi@customology.com.au for more information on how your business can identify the customer groups who can add real value to your business, and drive customer loyalty.

¹ Gartner



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