Customer retention – How to retain existing customers
Customer retention – If making continuous sales is what every business wants, then customer retention should be on top of priority to achieve and further surpass this objective.
Some businesses are however more concerned with customer acquisition than keeping the existing ones.
In view of this, a lot of marketers have conflicting ideas over which is more important.
Customer acquisition seems to be popular because there’s something very satisfying about gaining a new customer, probably because it’s great to finally see a success from all the money, time and effort that is invested into marketing campaigns.
However, the burgling truth for existing business is, it’s often better to focus your effort oncustomer retention.
Ever cared to ponder the point in investing time, effort and resources into customer acquisition only to waste the potential of their relationship once you have them on board, think about this constructively?
If you care to know, it cost five times more to acquire a new customer than retaining an existing one. Increasing customer retention rate by 5% profits by 25% to 95% according to research done by Reichheld of Brain and Company.
Why customer retention is key?
1) Study has shown that it’s cheaper – it involves less work to retain your customers as acquiring new ones is very expensive.
By targeting existing customers with interest in your product and willingness to buy, you stand a stronger and reliable chance to make sales. It as well provides a chance to demonstrate your commitment to rendering acceptable service.
2) As you are aware, it’s faster– It’s easier selling to existing customers than it is selling to new ones. Existing customers already know you’re a company to be trusted, it hastens the process.
With that said now, it becomes necessary to understand how to make them stay with you.
How to retain existing customers
You may have to adopt the strategies as outline below to get your customers loyal to you/brand
1) Reward patronage – For every customer who decides to buy from you, there are a number of brands they could choose to patronize order than yours.
Look for a way to appreciate and reward your customers for making you their preferred choice ahead of other competitors in business.
Rewarding your customers with gifts and loyalty programs can help drive return visits to your shop and even help spread the word about your business through word of the mouth to increase your customer base.
You can do this by:
- Celebrate your customers by featuring the customer of the week or month on your website, social media or in your next email.
- Create an early access program by giving them access to a new product that hasn’t officially been launched to anyone.
- Invite them to special events, this can be a great way to spread some positive goodwill and get people talking about your business.
2) Offer great Customer Service – One good factor that keeps bringing your customers back for repeated business is “great customer service.” It’s not just negotiable.
They could have ordinarily buy from some other competitors, but your relationship with them keeps them so close to you.
There should be a Unique Value Proposition which makes you stand out, customers are very sensitive with your business disposition, as such you should develop a customer centric approach to them
Make them feel respected, loved and held to a high esteem.
Great customer service results in increased personal and business purchases while a bad customer service drives customers to find alternatives.
Customer service has a long term impact on buying decisions, there lies the most decisive point.
3) Listen to your customers – It pays to listen to these customers than trying to induce them into making another purchase, when they aren’t satisfied or have reservations to make on initial purchase.
One positive factor to take out is, these customers will give a better brand perception if you could listen attentively to their complaints.
What are you expected to do after listening, implement necessary corrections and adjustment to suit your customers, that way you can keep them, having felt valued for correcting a defect following a complaint.
Customers’ reaction to your product can tell you what such product lacks, If you are the only player in a niche market, customer feedback can give you ideas for accessories that are valuable add-ons to your existing items.
If you’re competing with other companies, feedback will tell you what innovations to bring in that will make you the go-to company for that item.
4) Send them text messages and emails at special occasions – How do you feel receiving an email or text message from your favorite grocery store on your birthday?
What if they sent you felicitations at festive seasons, isn’t that wonderful, sure it is.
Always address them by their first name, but preferably as they wish to.
Nothing gives sensation than making a customer feel loved, remembered and being cared for especially at special moments to them.
It doesn’t cost a fortune to do this, try it and see how loyal and reliable your customers can be.
Other customer retention strategies according tobuildfire include but not limited to:
1. Offer customer service “surprises”
I always look forward to great surprises at my birthday.
But I’m not alone. We all love surprises.
When it comes to nurturing your customers, think of a valuable offer that you can offer them – without their knowledge.
Surprises come suddenly. They’re not planned. Surprise packages or offers don’t have to cost you a fortune.
In fact, Jawbone sends a handwritten note to its customers. Customers love it, because it shows how much the brand values them, since they could take out time to write to every customer manually. To me, that’s a big sacrifice.
If you want your customers to stay put and trust your brand, then you should get beyond the normal service or product that you offer.
Surprises motivate customers. It can come in the form of appreciation. And appreciation is a strong motivating factor for hard work. In other words, when you appreciate people, they feel excited about their work.
Psychologically, scientists say that surprise is good for the brain. It also brings pleasure. It’s the spice of life. Don’t wait until your customers make a request. Step out and surprise them.
Reciprocate good gestures. Surprising your customers will inspire them to leave honest feedback about your product, and brand. Trust me, this is priceless.
Surprising offers make your customers feel like they’re part of something bigger.
Offer your customers free gifts and discounts when they aren’t expecting it. This will definitely change the lens through which they see your business.
2. Set customer expectations
Give your customers something to look forward to.
Customer service has gone beyond attending to inquiries and complaints, you also need to meet their expectations – even when you didn’t get their feedback.
But, it’s hard to satisfy someone you barely know. So, get to know your customers intimately. Understand what they desire most, and use these pointers to set expectations.
As you set and meet customer expectations, you’re empowering them. According to the Harvard Business Review, “customers want to be empowered, not controlled. You have to act with empathy.”
One of the ways to set and meet customer expectations is to be honest when making a promise.
This is where most SEO agencies fail flat. Majority of them make unrealistic promises to website owners. They promise to rank their websites in Google #1 fast.
If you’re into search engine optimization and you work with clients, don’t ever guarantee any first page result.
If you don’t achieve top rankings within the stipulated time you promised your client, do you know what just happened?
You’ve failed as a brand.
Here’s what I advise my clients: “Don’t over promise if you know that you can’t deliver.”
As marketing consultant, Roy Hollister Williams puts it, “the first step in exceeding your customers’ expectations is to know those expectations.”
For instance, be conscious of what you promise in your response time and keep to it. If you promise to deliver product 30 minutes after order, just do that.
Better yet, you can deliver in 25 minutes time. You must not go below expectations.
Promise what you can do. Set expectations that you can meet. In the event that you’re not able to meet expectations, apologize and compensate your customers. Compensation is not enough.
If a customer is expecting a high quality product and service, but gets a crappy product – regret will follow. They’ll begin to regret purchasing the product in the first place with their hard earned money.
Realising that your customer’s satisfaction is key to sustaining them will help you build a sustainable business.
Once customers are badly treated, they live with it for ages. And they’ll find it difficult to forget negative experiences and undelivered promises.
3. Build trust through relationships
Successful businesses are built on trust. When two people are involved in a business, if there is no trust, the business dies.
And there are only two persons in your business:
You and the customer.
Seeing how important trust is to your business, you’ve to consciously make attempts to promote trust. As you initiate relationship with new and existing customers, you give them the opportunity to trust you.
Ideally, when you’re looking to build trust, use the customer behavior data to deliver enormous value in your product. That way, they will continually nod and accept your recommendations.
The moment customers discover that you’re not trustworthy, they will switch to your competitors. Nothing scares customers away like bad experience Worse, they’ll spread the negative news with others, you need not be told your customer retention in this light will be next to zero.
The commitment of your customers will be firm when trust increases.
A survey conducted byConcerto Marketing Groupstated that 83% of customers will recommend your brand to others if they trust the brand. While 82% will stick to your brand if they trust it.
This means that when you build and grow trust, your customers will gladly advertise your brand – without asking for any compensation.
Lexus Sweden builds trust through customer conversations. “We communicate with reviews instead of just using traditional marketing because authentic customer commentary is more trustworthy,” explains Drakenberg.
4. Use automation to re-engage customers
Automation is allowing some of your routines to be handled automatically be a software. The most popular is “marketing automation.”
Monitoring and keeping your customers abreast manually is time consuming.
Because there are so many processes to be repeated daily, in order to keep your brand fresh in the customer’s mind.
Truth be told, there are series of marketing automation. The most obvious is the data quality and integration. Poor marketing process is also a big factor.
Automation will set you on a faster pace more than your competitors. See proof below:
The idea here is to use automation to re-engage your customers. Sure, you’ll see a boost in conversion rate as you engage customers manually, however, you can communicate stronger and faster through automation.
Do you promise to send useful email newsletters to your customers twice a week, as well as SMS to new customers, tell me: how can you handle all the task without automation?
When your processes are standardized, it will give you the opportunity to deliver on the promises that you made to customers.
Through automation, you can manage your customer contacts, drip feed education emails, schedule promotional emails, text messages, and event notifications.
5. Improve KPIs around customer service
KPI stands for Key Performance Indicator.
Klipfolio defines it as a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs to evaluate their success at reaching targets.
KPIs are equally regarded as a roadmap. Because they help you visualize what the future holds for your business, and what direction you should be taking.
By carefully studying your key performance indicators, you can tell what gets your customers excited or unhappy.
At a glance, you’ll agree with me that delivering a great customer service and making it easy for customers to access vital information and support is critical.
And this is one of the core reasons why you need to automate marketing processes. For example, Help Desk software can help you map your customer persona, set up a campaign, and collect vital customer behavior data.
At the end of the day, whether you’re in charge of customer service or administration, you can easily tell how your customer support treats your customers. The KPIs will reveal everything.
But the essence of all these is to render good services, and meet customer’s goal at the end.
Here are the 5 essential KPIs for effective customer engagement:
i). Response Time: When customers indicate interest in your offer, response time is a metric that measures how quickly you contact customers and interested parties with an email, live chat, or a sales call.
Time is critical here. If you delay, your conversions will be low. In the same vein, responding too quickly may not be right for your brand. You’ve got to find a balance.
Real estate experts believe that your response time should fall in between 10 – 20 minutes. That way, you’ll get optimum result, without leaving any footprint.
ii). Conversion Rate: This measures the relative response that you get when you put the call across, send a quick email, or have a live chat with either a new or existing customer.
As you send outreach emails, how many of them were opened? Out of the opened emails, what percentage of these led to sales?
Conversion rate is a key performance indicator that’s critical to every business, irrespective of the industry. You can also measure conversion rate within your funnel– to determine how you’re attending to customer’s specific needs at every stage.
iii). Funnel Drop Rate: Getting new subscribers to your list is awesome, but you equally want to measure how often people unsubscribe from your list. That’s what this KPI is all about.
iv). Actions per engagement: The moment you begin to measure your customer’s response to calls, outreach emails, you’ll be amazed by the result – because, patterns in their behavior will start to emerge, which enhances customer retention.
With this new behavioral pattern, it’s easier to determine how many times you need to engage (e.g., call, send email) with your customers before they take the necessary action (e.g., purchase a product).
v). Communication freshness: When was the last time you sent email, made a call, or had a conversation with your existing customers? What was the outcome of the last conversation?
Until you’re passionate your customers and dedicating time to engage with them, your business will likely suffer.
6. Leverage customer feedback surveys
Surveys are powerful tools for building customer engagement. Surveys may look boring, but people like it.
According to Fluid Survey University, “The Average Response Rate for email surveys is 24.8%.” And there are several benefits associated with email surveys. Take a look:
Truly, hearing from customers directly to know how they feel about your products and services is a great way to cement the bond that already exist. In essence, it can help you develop engaging custom content for customer retention.
When customers are given the chance to express themselves, they reveal their minds and feelings about your brand.
In their complaints, be sensitive enough to catch the pain points. Get to know the areas they’re not satisfied about and why. Adjusting in those areas will turn things around.
Warning: Don’t frown when your customers complain, it does not guarantee customer retention. Be patient enough to hear them out. Their feedback is all you need to scale from being a mediocre or average business to a respected brand.
Remember that through feedback, you can re-engage a customer that’s about giving up on your brand.
No matter how you look at it, automation can help your business in so many ways. Most striking is the fact that it can help you engage and retain your customers.
Master the act of customer retention, every single effort applied in this direction yields avalanche of dividend. It saves customer acquisition cost and puts you at the right seat, forecasting for possible innovations that will grow your business and satisfy your customers than acquiring more without having them stay.