A basic truth in the business world is that competitors will seek to outperform you. Another one is that customers are always on the lookout for a better deal. For some industries, customer churn rates are low, as little as 7 percent in industries with high-exit barriers like banking or insurance. For others, like the mobile-phone or telco industry, consumer attrition rates are as massive as 40%. So, slowing the rate of customer churn by even 1 percent can add a lot of cash and build the company’s profits. While acquiring customers is essential for business growth, it is way more expensive than retaining customers. Therefore, an effective customer retention strategy is critical for any business that seeks to be successful.
Many mobile phone companies are now reinventing themselves to shift the focus of the corporate culture and provide an outstanding experience for retaining customers. Mobile phone service is seen as a commodity by customers across the world. As is the case for new markets, cell phone providers have largely concentrated on the acquisition of customers at the cost of service quality and retention. This has led to an emergence of a buyer’s market, where customers seek to get the best deals during the sign-up or contract phase of relationships with a carrier. A majority of the customers are open to changing mobile phone companies to lower monthly fees, increase the duration of talk-time or receive a better gadget or cell phone.
Importance of Retaining Customers
As the rate of business growth is beginning to slow, mobile phone providers are seeking new and certain ways to build their business. Once a large percentage of the investment dollars have been spent on growing network capacity and coming up with new customer acquisition programs, market leaders are now reinventing themselves to shift the focus of their corporate culture to retaining customers and providing an outstanding experience.
Altering strategies and taking on a customer-centric approach has proved to be a challenge for companies in numerous industries. The transformation is tougher for the mobile phone companies that have not yet invested in creating a centralised back-end serving infrastructure. The competitive mobile phone market implies that those seeking to lead the markets need to be creative when it comes to building their service infrastructure and providing an outstanding experience to boost customer retention. In an era where consumers are spoilt for choices, competitive prices abound and innumerable discounts and offers are definitely catching the eye.
Brand loyalty among users has become scarce. With over 83% of US adults owning a mobile phone and 42% owning iPhones, Blackberries or other smartphones, according to the Pew Internet project, close to 87% of cell phone users resort to internet access or email correspondence on their smartphone device. Additionally, two-thirds of the smartphone users do so daily. The home broadband connection remains on, too. Mobile device marketing to encourage client retention, therefore, needs to focus on these tips, tricks and strategies to ensure a great user experience:
#1 Make Retention and Promotional Emails User-Friendly
While delivering email marketing on mobile devices once used to be an option for companies, now it’s a norm. Keeping the message’s subject line short and placing the brand name in the message, offer, call-to-action and ensuring a strong bond with the audience is a must to retain customers. The email design needs to be kept light and simple on the text and link to social media channels so users can learn more about you.
#2 Giving Mobile Customers What They’re Looking For
Close to 43 percent of American smartphone owners compare prices on smart devices while shopping for a product, as per HubSpot. If one does not optimise the site for mobile users, sales opportunities are missed. The most essential information and popular features should be at the forefront of the customer’s attention. Your retail site needs to be customer friendly. A savings coupon or special offer can sweeten the deal for customers signing up through text messages or QR codes.
#3 Build the Social Media Following
Socially active customers are found on social media channels like Facebook or Twitter. Here as well, the speed at which complaints, disputes and conflicts are resolved can play an important role in encouraging individuals to connect further with your mobile phone company and bring in referrals, repeat purchases and brand advocacy. Additionally, one needs to respond to reviews. Encourage people to check in on location-based services. Gain information about regular customers and how frequently they visit you. It also helps in sharing tips and information about businesses with existing clients. A unique special offer can encourage regulars to check in more often.
Encouraging consumers to share thoughts about their shopping experience with your mobile phone company on sites like Where and Google Places can be extremely beneficial in connecting more deeply. Ensure that the customer’s Twitter handle is posted online. Customers should include your social media credentials in their reviews, too.
#4 Implement Customer Loyalty Initiatives
When it comes to customer retention from Pathwwway Ltd, EU and Asian cell phone companies have been ahead of North America, much like the consumers. Telcos in these countries tend to get loyalty right. With high overseas saturation rates and carriers operating primarily on pre-paid non-contractual services and correspondingly high churn rates, many companies have implemented customer loyalty programs to combat challenges.
Consider Turkish company Turkcell which offers benefits geared towards surprising and delighting customers with rewards such as free theatre tickets. Turkcell has been using program data in ways that have paid off, by pinpointing the segment of consumers who don’t appear valuable, but who actually drive business through frequent calls and texts from others. Another trend has been to offer bundled benefits, but telcos are innovating more so, since the 2000s.
To ensure customer retention, segmentation and benefits are being combined to hit the correct tone. The present benefits packages include hard as well as soft rewards. Research has found experiential rewards impact client retention rates the most. In fact, customers redeemed for these rewards are more likely to remain loyal to your brand by as much as 10 percentage points. Customers need to stay on the line if phone companies can make the connection to the right segment with relevant benefit mix.
Excellent customers are assets which can serve as a handsome stream of lifetime-income for a company. The market has boomed at a rapid pace in the mobile/telecom sector. Competition has become stiff as traditional telecom and mobile phone brands have moved out of the status quo and invested in processes and technologies that require expensive investment. Additionally, given the market-penetration values in all the saturated markets, there is no space left for new clients.