Portland Marketing Analytics (PortMA) | Portland, Maine

A New Look at Customer Retention

f1Consumer packaged goods are interesting, specifically because they have such low customer retention rates. With virtually no cost or other apparent downside to changing brands, people have little reluctance to switch. Because this is such a difficult consumer response to measure and understand accurately, CPG Marketing has chosen to focus on getting people to remain loyal after making a switch.

Our historical data indicates that, among consumers who had tried a product (but not in the last three months) 82% or more indicated they would be willing to purchase the product again. This high percentage would seem to indicate it isn’t the quality of a product that’s causing people to switch.

These past customers represent an average of 21% of all consumers. Combined with the 82% who are likely to purchase, overall, 17% of consumers who have tried a product before and are willing to purchase again in the future don’t necessarily follow through.

What is standing between these people and a purchasing decision?

  • Could it simply be a matter of distribution?
  • Could it be that your product is viewed by consumers as a convenience item?
  • Could it be being displaced by a competitor’s product more conveniently located?

These can be tough questions to answer, but they can also be the most worthwhile to pursue.

Review cross sections of distribution and purchase intent, and graph your weakest and strongest markets. Then examine what makes them unique. You might find the outcome very interesting. Expect each product investigation will generate a unique result, but the consistent existence of that 17% means it’s something we all should take into consideration.

What we see when we pursue that path of investigation has the potential to create significant gains in what is, at least, perceived as consumer loyalty.

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