Customer Strategy: Definition, Different Types & Retention

In the simplest of terms, a customer strategy is a plan for dealing with customers, but as anyone in business will tell you, customers are never simple. Customers are the be-all and end-all of most businesses, and without them, there can be no success. That’s why there’s nothing simple about customer strategies, and it’s also why there are so many definitions and compartmentalized takes on what makes a customer strategy.

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A brand's customer strategy should involve everything from how the consumer learns about the company to what kind of follow-up ensues after the purchase. Companies that focus on the consumer are much more likely to experience repeat business, which is far more cost effective than attracting new customers.

The topic of customer strategy is a hot one on the internet, and paging through the results, you’ll find all kinds of topics, like the customer experience strategy, the customer retention strategy and even the customer-centric strategy, just to name a few. With business being entirely dependent on successfully winning, converting and retaining customers, there's good reason to have such a variety of strategies across the consumer journey.

Ultimately, what makes a strong customer strategy varies depending on the company in question. It’s about knowing your customers and what they want, why they want it from you and how to keep them happy. Once you know what it'll take to convert and keep the customer, you have the basis of a customer strategy.

There are all kinds of facets to business, but the heart of business is the customer. Without customers, there is no business, and that’s why there are so many segmented aspects of customer strategies — how to win them, how to keep them, how to wow them and so on.

Some companies make the potentially fatal mistake of only looking inward when making their business plans. They focus on their product, their delivery, their warranty and so much more, but they may overlook the customers and their experience of the company, their perceptions, their actual needs versus the needs the company meets and so forth. Without understanding all that surrounds the customer, the company's future could be shaky.

Today, with the 24/7 nature of the internet, customer strategies must diversify and modernize with more hours and channels of service. There are numerous ways in which companies break down their customer strategies.

Every company needs a plan for keeping its customers. Existing customers are money in the bank, and if you keep them happy, they provide word-of-mouth advertising too. The return on investment of keeping them is higher than that of gaining a new client, and it will cost five to 25 times less than attracting new blood.

Starbucks is legendary for keeping customers, and they do it through things like allowing personalization and convenience, which they achieved through developing an app for die-hard customers to manage their reward points, preorder drinks, pay remotely and more. Many brands use rewards points, or they’ve turned to gamification to encourage existing consumers to spread the word to friends and family to attract new business, and much of this is being done through proprietary apps.

Providing exceptional support is a classic move, and many consumers now pay more for good service than not, particularly the coveted millennial group, which is happy to pay extra more so than any other age group. Some brands like to surprise and delight their users with free gifts, like when Uber and Lyft occasionally send free rides to their users during car-share battles. Telecoms frequently are forced to turn consumers over to their loyalty and retention department when the customers want to defect to a better-priced competitor, and this is when they’ll roll out all the stops to keep their customers with free add-ons, lower rates, new tech and other freebies.

Customer service is essentially everything involving how consumer needs are met (or not). Companies who truly provide great service are reaping rewards these days, as consumers can now shout about receiving great service through social media and peer review sites — and they'll shout when service is lacking too.

Customer service strategy dictates how quickly consumers are greeted in a store, how quickly their calls or emails are returned, how they’re addressed, what kind of follow-through is provided after their purchase or service has completed and more. The trouble with most customer service strategies is that there’s a disconnect between the policy on paper and the reality on the front line.

If employees are not empowered to solve problems, then it doesn’t matter that they have a mandate to do so — the two things contradict, and employees will always defer to the side that best covers their butt. If there aren’t enough employees to answer calls or deal with consumers on the floor, then it doesn’t matter how you deal with consumers because the lack of speed or attention speaks much louder than any policies you might be trumpeting. Poorly trained staff are powerless to give great service if they fail to understand how the company expects service to be provided and the policies around service.

For some companies, customer service isn’t just about meeting a consumer’s needs and following up to ensure satisfaction. It’s about setting their brand apart from all others by making the consumer have an experience with their service or product.

One of the great customer experience examples is that of the consumer who bought the first generation or two of iPods because it involved opening a high-quality cardboard box with beautiful packaging, and it felt almost like a transcendent experience to pull out the iPod versus buying an MP3 player wrapped in industrial plastic. That was a carefully planned experience so the consumers felt they were unveiling a glorious new product, and it helped solidify Apple’s niche as being at the pinnacle of electronics purchases. If you had issues, the Apple-branded Genius Bar was always willing to problem solve on your behalf and usually for free, a service aspect that really set the brand apart.

Often called a “CX strategy”, the customer experience framework takes into consideration things like how to best communicate with your niche client, how to best provide service (like a 24/7 service social media account to help with consumer queries around the clock), how easy it is for consumers to spend money with you, how personalized the experience is and how simple it is for customers to learn more and delve into everything you offer, such as navigating your website.