Familiarity breeds repeat orders: 6 ways to boost customer retention

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There’s an interesting article in this month’s HBR about customer retention: how do you keep customers coming back? The authors dive into the psychology of purchase decisions and conclude that people are, basically, incredibly lazy. Rather than analysing your value proposition each time, apparently repeat purchasing comes down to customers choosing the easy option.

If you want to boost customer retention, make it a no-brainer decision. By that I don’t mean presenting all the evidence so that there is a logical conclusion that your product is the superior solution. I mean: take the requirement to think out of the process. According to the authors, existing customers (as opposed to people who have yet to buy your product) prefer to go with instinct and reach for the product or supplier that’s familiar and worked OK last time.

So how do you build that familiarity and automaticity so that a repeat purchase is just the obvious thing to do? The article provides lots of consumer brand examples. What if you’re a B2B vendor selling direct, and selling something more intangible than washing powder? Here are my suggestions:

Familiarity: “We’ve used them before”

According to the authors, consumers prefer things they can recall quickly to something that feels unfamiliar. The key is not just experience of a product, but also regular exposure to create a sort of automatic recognition. So the task here is to ensure that everyone involved in the purchase decision is very familiar with your brand and what you do. There are two key issues to address here:

  1. Regular exposure: After the initial sale and smiley face on the customer satisfaction survey, what usually happens is that customers get ignored until the annual support contract is up for renewal. Building familiarity means being visible between purchase orders: whether that is prominent display of your product in the customer’s warehouse or office, or e- newsletters popping into their inbox on a regular basis.
  2. Extending your points of contact: Buyers may not have any direct exposure to your company or product. Executives who will need to authorise the purchase order probably won’t visit the warehouse or IT department to see your widgets or network routers being used. How do you build familiarity with people that you don’t have direct contact with?
    Devise a way of getting your brand in front of the CXO or senior budget holder on a regular basis. For example, include “Briefing The Board” insights in each newsletter to encourage content to be shared beyond your direct contacts.

Positive association: “It does the job”

According to Levitt, the product features and functions that attracted customers in the first place are not what will make them come back. What does influence their next purchase decision is how well the supplier has helped them to meet their objectives. So the task here is to ensure that buyers have that positive association that your company helps them get the job done. Be the one that they reach for when they need help or advice. Two ideas come to mind:

  1. Brand: Create a consistent look and feel for reports, apps and software so that people can see your product at a glance. Use a consistent tag for emails and pdf’s so they can find your contact details quickly.
  2. Value: Help people get the best performance from their investment. It does take time to learn how to use all the features and functions of a new system, but how many vendors leave the customer to it after installation? Provide regular reminders about advanced functions, with tips & tricks about how to use particular features.

Uncomplicated: “It’s not something new that I have to justify to my boss”

Product evolution is essential for products and services to continue to meet changing customer needs and expectations. However, the authors give a salutary warning that while “new” can be a great way to attract new customers, it can turn your existing customers away.
Change is often perceived as difficult and unwelcome. When considering the next purchase, the easy choice will be something that feels familiar (I don’t have to learn a new user interface) whilst offering more value (I get better performance). As the authors put it: ‘“Improved” is more comfortable and less scary than “new”’. How do you provide a better solution without scaring them off?

  1. Tailor communication: Beware simply reusing lead-generation marketing collateral for communications with existing customers. New brochures and sales materials developed to attract new customers, and which emphasise the new and exciting models, are frequently just forwarded on to existing customers in the expectation that they will be equally wowed by the choices available. Unfortunately, something that appears to be quite different from the previous product ceases to be an automatic and comfortable decision.
    Rather than pushing them towards having to go through a rational decision making process, tailor your customer communications to nudge them towards a step-and-repeat decision.
  2. Support the transition: Where change is inevitable, avoid any concerns creeping into the purchase process by emphasising what doesn’t change (eg. people, technology, user interface, order process), and how you will support them so that transition is smooth and painless.

Final thought:

Existing customers have chosen your products and services. It’s tempting to assume that experiencing the benefits will persuade customers to stick with you in the future. What the HBR article implies is that you shouldn’t take that for granted, but some simple actions and regular attention can make the most of the advantage you have.

Fran Bodley-Scott

Fran is a business communications consultant specialising in customer and stakeholder relationship marketing. She started out in engineering and product development before moving into marketing and business development. Fran brings a blend of marketing experience, system thinking and creative design to client projects. She is a thought leader in applying marketing thinking inside the organisation and is passionate about improving business effectiveness and efficiency through relationship marketing.

If you are interested in talking with Fran about your project, please get in touch.