A Company that retains a high percentage of its customers must be doing a lot of things right. That’s why retention rate is the best indicator of a company long-term viability. But keeping customers can be very challenging. To succeed, you need to understand how and why your customers buy your products. In marketing we do that by defining four types of purchasing styles. The first one is what we call brand laziness.
Thats when customers want to be the expert in minimal buying effort. They don’t want to be bogged down with a log of information. They just want to buy something. Now consumers use this style with old, familiar products and services that have worked well in the past, so they buy them out of habit without even thinking about it. They have no commitment to the brand. Think about, for example, how you buy flour. This approach is highly effective for low-risk, simple products because it haves time and effort. Now the key here is to be careful not to disrupt anything about your customers purchase flow.
If you change the shelf location, the packaging, or anything that makes then have to think about too much about the purchase, you may lose them to another brand. They have had a good experience with it and they know a lot about it. Instead of buying it out of habit, they buy it because they are emotional attracted to it. The key here is to continue to deliver high levels of quality and service.
Consistency is the name of the game. If you let them down, they start drifting away. Next are the variety seekers, people who shop for new alternatives over more familiar ones. Variety seeking is the opposite of brand loyalty. Consumers use this style because they have yet to fall in love with a particular brand. Try to get your customers out of this style as quickly as possible. Otherwise they’ll keep switching back and forth between you and the competing brands.
Try to lock them in with a free trials, follow-up service, or discounts, or perhaps a loyalty program. Finally, the problem solvers. As the name implies, consumers use this style when dealing with complex products involving a lot of risk and uncertainty. They need to be highly involved and they need to gather a log of information, especially if the product or service is expensive or purchased infrequently. Think about buying a car for example, or shopping for a plastic surgeon.
It takes time and information to make a good decision. Now as a marketer, you have to help customers when they’re using this style. First, approve as much information about the product as you can. Make sure its where people can find it, in your stores or online, or perhaps with your salespeople. Show comparisons between your product and the competition. Loyalty drives thigh retention rates. The best marketers are those that understand each type of loyalty so they can continue to give their customers exactly what they want.