If you had to pick one thing as a business, which would it be?
A new marketing campaign focused on customer acquisition? Or efforts to retain and maintain your relationship with your current customers?
A lot of businesses often choose the former. Who doesn’t love new customers, right?
Businesses often see marketing as being synonymous with customer acquisition – to boost their bottom line, increase revenue, so on. Marketing is the “silver bullet” to help you succeed.
Or is it?
What if you spent that time focusing on your current customers instead?
Your existing customers are an important resource. They’ve already bought from you, they trust you. Chances are, they’re likely to buy again.
Finding new customers, on the other hand, takes a lot more effort. They have to go through the whole buyer’s journey each time from scratch. Their cost of acquisition is higher as well, especially compared to retaining a customer already loyal to you.
Of course, if you don’t already have a customer base, you need to focus on acquisition first, because there’s no one to make a purchase in the first place.
But if you already have a set of loyal followers, improving your relationship with them might be the smarter choice.
According to research, acquiring new customers, on average, is anywhere from 5 to 25 times more expensive than retaining existing ones.
When acquiring new customers, you need to account for the extra time and resources for the marketing budget. But what if you spent that time on your current customers?
According to the same research, data shows that increasing customer retention rates by 5% can increase profits by 25% to 95%. Of course, the rates are different throughout the industries, but the main point is still the same.
Retaining customers is cheaper, and on average, more profitable than acquiring new ones.
So, with that said, here are some customer retention strategies that really work…
Customer retention management strategy # 1 – Provide exceptional support
When it comes to customer support, pretty much every SaaS company talks the talk. Unfortunately, a lot of them don’t walk the walk.
That’s a shame, because if you go to the extra mile for your customers, they’ll remember it in future. That’s why they’ll stay loyal to your brand.
Establish from the beginning that you’re available to help, and happy to do so. A simple “get help” or “contact us” button goes a long way on your website. Customers value communication as long as you do your part.
Did you know live chat has the highest satisfaction level for any customer service channels? It stands at a massive 73%, according to a study by Econsultancy. That’s compared to 61% for emails and 44% for phones.
Having exceptional customer support is underrated.
We often put a lot of effort into making a purchase an easy and straightforward process. But even if you perfect your UX, customers will always be curious and ready with specific questions about the product they’re going to use.
If done well, providing high-quality help can be the difference between a customer that sticks around or one that goes to a competitor. People appreciate the small things like support that helps with all of their concerns and questions. And from your side, it’s an easy way to retain customers, and understand them better.
The more you interact with them, the better it is for everyone involved.
But regardless of the platform, your communication tone should be the same. Be straightforward and kind, and your customers will thank you in return.
A little kindness goes a long way.
Customer retention management strategy # 2 – Measure and listen
A wise old philosopher called Epictetus once said, “We have two ears and one mouth so that we can listen twice as much as we speak.”
Once you establish a clear communication system with your customers, the next thing you might want to do is take a step back and listen.
This is one of the best ways to grow as a business. Not only does it impress your customers, but it also helps you better understand your target market.
In addition to improving your overall customer retention and customer support, you’ll be able to gain valuable insights which can then be applied to other parts of your marketing and business. After all, analytics and data are the backbone of modern-day marketing.
If you want to make an important decision, you’ll need to know how your customers will react to it. Creating a customer profile once you get to know them enough is a really great way to tap into their minds.
Look at each touch point you have with your customers and see if you can improve it. Listen attentively to what your customers have to say, and apply that feedback accordingly.
Consider your customers’ complaints. Criticism is always better than silence, because it gives you areas in which you can improve. Most customers click away without leaving any feedback, so when you do get feedback you need to make the most of it.
There’s a lot to learn from criticism.
Once you build a close relationship with your customers, you can then ask and receive feedback on specific areas of interest. You might want to learn what they think about a new feature, for example. You can then use this information to increase sales, acquire new customers, and better retain your current ones.
Listening may be a passive activity, but it’s an important one nonetheless and can drastically affect your business.
Customer retention management strategy # 3 – Perfect your onboarding
When are your customers at most risk of churning? You might think it’s as their contract is due for renewal, or maybe when they assess their annual budget. In actual fact, it’s when they first start using your product.
Your customers are busy people. They don’t have time to learn complicated software. They want value right from the start. If your product doesn’t provide that value fast enough, then they’re going to look elsewhere.
That’s why you need to invest in onboarding.
If you take the time to perfect your onboarding, you’ll be able to deliver value to your customers as soon as possible. That’s what will ensure they keep using your product.
A good approach is to focus on your product’s Aha! Moment. This is the moment where it all clicks into place, and your customer experiences the kind of value your product provides.
You need to streamline your onboarding so that it focuses entirely on leading new customers to the Aha! Moment. Think about the fewest number of steps required to get there. That way you reduce time-to-value, and your customer can get up and running as soon as possible.
It’s even possible to provide value before a user even becomes a customer. That’s exactly what Stripo do. They use their product’s Aha! Moment as a marketing tool.
You can access a demo in one click, that shows you the basics of the product. You instantly see the value and experience the Aha! Moment. Any customers who sign up after experiencing the demo are bound to stick around.
Once a customer has experience that initial Aha! Moment, they’ll still need guidance. That’s where contextual onboarding comes in. Contextual onboarding means you show the right message to the right user at the right time.
In other words, the onboarding flows are triggered by a user’s in-app activity. This approach means your customers can learn by doing, and don’t have to sit through boring walkthroughs and product tours that aren’t related to their use case.
It’s worth taking the time to perfect your onboarding. As a customer retention strategy, it helps you to stop customers churning at an early stage, and helps them get value from your product right away.
Userpilot enables you to create contextual onboarding flows that help you deliver value to your customers. It’s completely code-free, so you can start making improvements right away. Why not start a free trial?
Customer retention management strategy # 4 – Gather social proof
Having a hungry and loyal customer base is the dream for all businesses. But this is easier said than done. Brand loyalty has been steadily decreasing over the years.
When people can click away and find another alternative within seconds of looking at your website, it can be hard to capture their attention and stop them in their tracks.
One particularly effective solution is gathering and cultivating social proof – and presenting it to your readers.
Just about everyone reads reviews before making a decision. 94% of all customers read online reviews, and 72% don’t take action until they’ve read one (Source).
So, what does this say about your customer retention strategy?
People are thirsty for information and feedback that will help them make a decision. As a business, it’s your responsibility to give it to them.
In other words, when your customers want to spend money, you have to eliminate any reluctance they might have.
Reviews, testimonials, social media interactions, and more, are all great indicators of social proof. Most businesses’ social media pages tend to be public and easily accessible. So, any curious customers can take a sneak peek at your profile to see what others are saying.
How you present yourself and how you’re interacting with your current and new customers drastically affects how your audience sees you.
Customer retention management strategy # 5 – Offer incentives
Incentives come in many shapes and forms – discounts, giveaways, exposures, and so on. And they’re all a great way for customers to interact with your brand.
Sometimes, all your customers need is a little bit of encouragement. You can always try to push them to purchase if you find that they’re hesitant.
At the end of the day, customer retention management is about brand loyalty. And brand loyalty is like a good friendship. You need trust, continued communication, and sometimes even free gifts to keep it going and take it to the next level.
Just because a customer once bought something from you once, doesn’t mean they will again. It’s a good idea to incentivize them and turn them into forever customers.
This begins with continued interaction with your brand. A good start is to get your customers to follow you on social media. Make sure you’re offering high-quality content and adding value there so they stick around.
Once you’re in their social media feeds, you have lots of ways to provide incentives and customer interaction. Your options may be based on your product and type of promotion you offer, but regardless of your niche, remember everyone loves free stuff and discounts.
Feel free to get creative in that regard.
Customer retention management strategy # 6 – Personalize your messaging
If you truly care about your customers – show it.
And if you truly want to leave a lasting impression and turn a repeat customer into a loyal one – get personal.
Take the time out of your day, and write a simple, personal hand-written note that addresses your customers personally. This attention to detail will not only help you stand out from your competitors, but also lets your customers know that you really care.
What’s more likely to leave a lasting memory?
A personal hand-written letter or an email template filled out with the bare minimum personalization?
These considerations go a long way with your customer retention management and relationship and can create a loyal customer for life. The more personal and unique to your brand – the better.
Marketing should be personal. If a customer reads your message and feels as if you’re they’re talking with you one-on-one, then you’re on the right track.
According to a 2014 study, those investing in personalization report a 14% uplift in sales on average. In addition to that, personalization also improves customer experience, branding, and your overall positioning.
To keep track of your overall customer-relationship and retention management, consider investing in CRM software. Use what you know about your customers wisely so that you can personalize your communication in the future.
At the end of the day, even though gaining new customers is a sign of a growing business, losing customers is too expensive. And retaining your customers is cheaper than acquiring new ones.
Your current customers can increase your overall profits, as they’re more likely to buy from you than new prospects. To make sure that happens, you can employ these customer retention management strategies and invest in a CRM to better organize your relationship.
Here’s a reminder of the five customer retention strategies:
- Provide exceptional support
- Measure and listen
- Perfect your onboarding
- Gather social proof
- Offer incentives
- Personalize your messaging
While it is true that the more customers you acquire, the higher your profits will be, the same also applies to customer retention.
If you want to increase your profits and gain loyal and repeat customers though – focus on customer retention.
How are you planning on maintaining your current customer base? Let us know!
About the author
Uwe is the founder of online invoicing software InvoiceBerry. Small businesses and sole traders can create, send and manage their invoices, quotes and credit notes with the tool or use the free invoice templates to get started. In his free time, Uwe travels the world and enjoys experiencing different cultures.