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Thrive and Prosper: Customer Retention Online

The topic in the blog entry from March 2013 were customer relations and how you can integrate them into a holistic marketing strategy. This article will give you five tips to highlight how companies that are active on the internet can optimize their customer relationships to maintain a long-term business success.


Customer retention is the decisive criterion for a long-term business success:

  • According to RightNow, negative experience is the reason attributed to 89 percent of all customers migrating to a competing solution.
  • Along with this, research from Desk shows that 60 percent of all consumers are willing to pay a higher price for a better service.

Although the findings of this study are drawn from North America, one can form a general conclusion – customers turn away from a company if they have had a negative experience. As a result, there are negative consequences for the business, including sales losses and increased marketing expenses for the acquisition of new customers. Thus, customer retention is essential for a healthy company.

The reliance upon customer retention forms an ongoing challenge for companies because it is not a given constant. It needs to be integrated into the company strategy through a continuous optimization. The Internet, with its various opportunities for interaction between the user and the company, increases the potential to get in contact with the customers and to strengthen the bond between them and the brand. Following on from this, we have provided five tips that are the foundation of a successful strategy in achieving long-term customer retention.

1. Personal communication

Word-of-mouth is an unpaid and trustful way to spread advertising messages to potential customers. Satisfied and happy customers tell their friends and family about their experiences with the company. Specifically, this is why a company should not address interested parties and customers as a crowd, but as individuals. When using an online communication channel, keep in mind whether it is an e-mail, a newsletter, or a social media activity. Once the context has been set, the customer should always be addressed by their name and/ or the company face.

2. Listening and constant improvement
The company should ensure that the customers’ opinions are heard, processed, and that the resulting suggestions for improvement will be implemented in the best way possible. The company can do this in a customer-oriented style, or even actively integrate the customer. The first suggestion means, among other things, to regularly conduct online surveys, which can include questions regarding customer satisfaction and initiate improvement measures. The second suggestion refers to involving the customer with the improvement processes. This can be done via virtual communities online. A question is published on an internal or external online platform, and the users are invited to actively submit their responses and ideas. In virtual communities customers can exchange their thoughts and a host can steer the idea production process. While doing this, the company can get a quick and easy insight into the customers’ opinions and scrutinize them at the same time for the benefit of the business.

3. Establishing trust
Asking customers for suggestions, taking them seriously and then implementing them strengthens the foundation of trust between the customer and the company. Therefore, any improvements on products or services should be clearly communicated to the customers. For example, the virtual communities that we mentioned earlier offer the space to present new solutions. This way, interested parties and customers learn why a new product was developed and which added value it will bring. As a result, the users can be integrated into the development process. If customers help to develop ideas, in a second step they should be rewarded for their ideas. This tells the target audience that their opinion is not just welcomed but also valued. You can then close the circle, for instance, by officially indicating on the package (“designed by users”) that the product was developed together with the customers.

4. Transparency
Transparency creates trust and trust creates customer retention. But what is transparent behavior for a company? Transparency means that companies are frank with their customers and also take an honest stand on negative events. With the Internet, the significance of reacting promptly to criticism has risen enormously. This is due to the fact that criticism is expressed publicly, and in worst-case scenario it can spread within a few hours, triggering a chain reaction. There are several focal points. For example, on social networks where the company is represented- If a user leaves a negative comment about the product, the service, or the company itself, you should react quickly and adequately. The critic should neither be attacked for his comment, nor should the message be ignored. It is important to take the problem seriously and to offer a constructive solution. Only those who can handle criticism adequately, give their customers a feeling of professionalism and transparency.

5. Thank you!
The two little words “thank you” should conclude each customer contact. Customers buy more, and also more frequently from a company if they had a positive and personal experience. Especially so when solving individual problems for the customer- it is essential to conclude the contact with a special thank you. On the Internet this is very simple; after each transaction or expressed criticism – positive or negative – the customer should receive a personalized e-mail, thanking him for the interaction.

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