Customer Retention: The Last Mile

Posted by Martina Mercer 14 Mar 14

Retaining customers costs five times less than generating new ones and can even deliver higher returns. A loyal customer can be tempted to increase their average basket value while a new customer requires a lot more work.


With this in mind it’s quite shocking that the average customer loss per business per year is 20%, with some losing as many as 80%. Although the biggest brands such as John Lewis have understood the importance of customer retention for a while, some smaller businesses still don’t realise the incredible impact these losses can have on profits.

Even a ten per cent difference in retention rates can separate companies considerably with one growing substantially, the other reaching a plateau. It’s usually at the last mile that companies have the opportunity to raise their retention strategies. This is because it’s the last memory of your business that you leave the customer with and if it’s positive they’re more likely to return.

Retention is all about making a great LAST impression. Your first impression has worked, your customer has bought your products, now leave a lasting impression that keeps them coming back for more. First you must decide which tactic to use, the positive retention or negative retention strategies? Positive retention keeps customers coming back due to benefits you deliver, quite simply, they have a choice. Negative retention ties customers up in red tape so they can’t afford to escape (consider mortgages and banks). Focusing on the positives here are a few different ways you can retain customers:

1. Loyalty

Loyalty schemes give customers a reason to return.

2. Rewards

Rewards will bring customers back but they must be relevant to the customer’s needs.

3. Value for Money

If you sell a product of high quality for a good price, your customer will return knowing they can’t find better elsewhere.

4. Membership

Many brands now have memberships along with forums. Each member receives a discount that non-members don’t, giving them a good reason to return.

5. Social Bonding

Bonding with your customer is an ideal way to retain their custom. Maybe you share the same eco values or the same geographical location?

7. Commitment

A committed customer will always be yours. You have exceeded their expectations and they know they won’t find better elsewhere. This is the type of customer you need to aim for at all times. Here are some strategies you can implement today to ensure you keep your current customers.

a) Follow Up, Follow On

Many sales people ignore a customer once a sale is made. There are thousands of new customers waiting to spend cash and so they see their job as done. This of course makes the customer feel like a cash cow that’s dumped as soon as the business has got what they want. All it takes is a follow on phone call a few weeks later to ask if they’re still happy with the product. If resources don’t allow that, send an email to let them know you still care. This also helps with the feelings of buyer’s guilt as you replace the guilt with reassurance that they’ve made the right move in buying from you.

b) Invite Them In

One way to ensure loyalty is to give your regular customers access to your business that others don’t have. This could be by asking them to rate your products, listening to their feedback or making them an authoritive voice in your forums. Let them know that you value their opinion because, quite simply, you do.

c) See every Complaint as a Bonus

If complainers see you are listening and responding they’re more likely to stick with your company as they know they’ll receive a swift resolution to any problems the next time.

d) Leave them with a Lasting Impression

You may have given your customer great service, your product may be excellent value for money and you may have convinced the customer that they made the right buying choice… until they receive the item. There are three types of packaging, transit, primary and secondary. The secondary packaging is the box it’s delivered in, the primary is the package that holds the product (shampoo bottles etc.). Avoid the following:

• Overkill (Too much packaging,  leaving the customer with concerns about recycling)

• Fiddly packaging (Difficult to open, difficult to use)

• Weak pacakaging (Splits, bursts, collapses – think milk bag refills)

If your packaging is any of the above, your customer will be left with the impression that you’re actually an amateur. Instead aim for packaging that either raises no comments at all or set your sights higher and exceed expectations.

e) Make it Personal

With social media there’s no excuse not to build up great relationships with customers, even on a one on one basis. Although it’s impossible to speak to every single one, it is possible to reply to tweets or respond to comments. For customers this direct contact is akin to connecting directly with a celebrity, you make your company seem real and accessible while encouraging true customer loyalty.

f) Bespoke Offers

A quick and easy way to show you care is to present customers with offers that are relevant to their needs. This shows you’ve taken notice and you’ve taken the time to predict their next move (even if it is through a remarketing campaign).


In all cases true customer commitment and retention comes when you go beyond the book, exceeding expectations and meeting the customers’ needs almost before they realise they need anything. Making life easier for the customer is always a way to retain custom, for example, send a courier to pick up a return from their home rather than expecting them to make a special trip to the post office. With so much competition, retention is essential and with the right staff and the right systems you can make sure you’re the best at customer care in your industry.

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