Retention and Relationships

My latest at VentureBeat’s Entrepreneur Corner.

This was an interesting article, primarily since it was very focused on a specific task – generating a second sale.  While repeat visits often happen naturally, nudging customers to return is often necessary.  The second purchase is incredibly important, since it identifies the customer as someone with the potential for a long term relationship.  Additional investment in the relationship will have a far higher likelihood of paying off with these customers.

Thinking about customer loyalty drivers even more, it seems there’s a fourth type – Inertial.  This is loyalty to a brand or company primarily due to a lack of willingness to change.  This is more habit or pattern than loyalty, but is still reflected in preference for one brand over another.

Marketers can take great advantage of Inertial loyalty, through a steady stream of marketing messaging and impluse drivers.  These customers will continue to respond and interact, without much prodding.  At the same time, these customers have no explicit tie to your company, so they can be persuaded to leave at any time.  Witness the 8% increase in churn at Verizon since the iPhone was introduced, which is a lot in mobile.

How do you identify this?  Not easily.  Customers who do not engage with the brand are far more likely to have Inertial or Involuntary Loyalty, although many customers with real loyalty also fall into this category.  The best way to address these customers is to migrate them to Rational or Emotional Loyalty.  At least then you have tools to improve loyalty.  Most likely your Rational Loyalty efforts will also resonate with these customers.