How to Retain Your Customers & Increase Your Sales

retail industry solution

It is decisive for a company to get a loyal customer and maintain him forever. There is no concept in business that is constant; there are many pitfalls in terms of loss-making etc. However, it would be suitable and appropriate for a business to have customer retention policies in place also to bring back old customers.

We would advocate 5-basic ideas to formulate a timeline plan in order to reach your goal of bringing back your previous sales results; this is also essential for your business.

Critical Analysis to Examine Why Customers Stop Buying

Consider carefully if there are some internal factors that are detrimental to customers refraining to buy from you.

If you identify those internal factors at the very outset, the best thing would be to look at your historical data of customers’ buying pattern; basically, it is sales records to check possible trends and changing pattern.

Next step is to look at your sales time series data to identify all those positive or negative variations for addressing the problem. Even while you are examining at your data and trends, take the liberty to ask yourself the following questions:

  • From when have the numbers begun to show disparities? Is it positive or negative disparities? When was the sale significantly high? But why such high numbers are not on a constant basis?
  • What special efforts have been put in that specific period when these numbers scaled up? Check the correlation between your activities and your sales numbers during that period.
  • Look out for your cream customers who have a massive difference in the quantity of their amount of orders and why is this difference. Evaluate these customers’ behavioral pattern of buying during different seasons on your trend data.

Conduct RFM Analysis If Customers Discontinue Buying

Next, you analyze your sales data and ascertain some conceivable motives for the decline in sales. Here again, you will be required to consider the performance of your customers.

The best tool for this purpose would be an RFM analysis test. This technique is used to determine quantitatively the best customers. You can even conduct this test by just monitoring your customers in the following ways:

  • When did a customer make the last purchase from you In terms of regency?
  • How often the customer buys from you; in terms of frequency?
  • In terms of monetary, check how much the customer spends on his purchases from your business.

This technique will aid in classifying each of your customers according to the RFM score. Generally, the RFM score will have three numbers. Each of these numbers simplifies where the specific customer according to the regency, frequency and monetary value is.

This data of all your customers will now be classified according to the RFM score. For instance, if the best customers have 444 as RFM score, it denotes 4 for regency, 4 for frequency and 4 for monetary value; so on and so forth.

If the RFM score has variable digits this means that this customer has come and bought something from you recently, but his buying frequency in the analyzed period is far from satisfactory. Your objective will be to increase the frequency score of this customer. You will observe that you still have scope for improvements in terms of the amount of money this customer spent in your business. You may devise tactics like up-sells and cross-sells; the strategies can work well.

After you have done with this exercise of analysis, open your customer database and contact all customers for whom you feel need to be improved upon for RFM score.

When you’re Customers Stop Buying Your Product Analyze Your Competitors

Your competitors could be the culprit if your customers no more buy from you.  This is the third step you will be required to pay attention to.  Check the activities of your competitors in the period when your sales begin to dip.  Find the answer to the following questions:

  • What strategy these competitors adopted during the specific period when your sales dipped?
  • Check out the correlation between their actions and your sales numbers?
  • How are you going to respond?

Often it has been found that there is a strong negative correlation between your sales results and competitor’s behavior. So it becomes imperative for you to be wary and investigate in detail for any shady activities. To check the activities, download the Competitive Analysis Template.

Do Your Customers Still Value & Cherish Your Products?

Get feedback, whether the products offered to your customers are still attractive.  The probability for losing existing customers could be a lack of variety and interest and also the repetition of products. Absence of innovative ideas, new products and services could also be the reasons for customers losing the value of your offers.

It is also important for you always to deliver the best and premium value for your customers. Your key task as a business person is to:

  • Understand Your Customers’ Point of View: Without seeing your business through your customers’ perspective, will not add value. The essential point to be noted here is your target customers and how your product would benefit them. You also have to consider if these products would be solving their problems and how significant it would matter to the target customers.
  • Delivering Beyond Expectations For Great Customer Experience: Surprise your customer by delivering a unique experience from initial lead capture to post-sale communication. Put all your efforts and undertake to make the continuous maximization of value delivered to the customer during your business process. You also must get accustomed to standard operating procedures in order to improve your business processes. A high level of customer connect is established by building customer relationship through extraordinary customer experience; resulting in delivering remarkably imperceptible value worth the efforts.
  • Customer Satisfaction is The Ultimate: Constant and steady improvement leads to customer satisfaction. Absence of customer satisfaction makes them stay away from returning to your company.  Regularly collect feedback through research or surveys from your customers and also interact with them.

Justify the Price Charged To Customers

The price quoted by you to your customers must commensurate with the value of the products. For an entrepreneur, implementing the right price is a sticky proposition. Thus far, you have evaluated the competition and ensuring customer experience. By improving the value that you offer your customers, you will know their choice or what your competitors offer. You could now estimate the value of your products’ worth. Put together all these strategies and make sure that the prices quoted to your customers are justified.

If it is not justified, change the pricing strategy to take part in the big game by considering the following points when your customers stop buying:

  • Learn from market trends by analyzing your sales data
  • Make an RFM analysis
  • Strategize to improve RFM scores on all crucial customers
  • Implement the above strategy progressively
  • Correlate and compare your competitors’ strategies in relation to negative sales trends and sales results
  • Find out whether the value offered to customers is still valid and correct
  • Stay updated for continuous improvement and to ensure permanent value by adding to your offer
  • Change your pricing strategy is required for developing your business.

Try and retain your customers.

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