If you had a choice as a business, what would you pick?
A new marketing campaign focused on customer acquisition, or retaining and maintaining your relationship with your current customers?
Most businesses are likely to opt-in for the former, because 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.
But what if you spent that time focusing on your current most valuable resources?
Your existing customers are an important resource. They’ve already bought from you, they trust you, and chances are, they’re likely to buy again.
Finding new customers, meanwhile, is harder as 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 on the other hand, 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 5 ways to perfect your customer retention strategy and better understand your target audience.
Customer retention management strategy # 1 – Provide exceptional support to provide better
Everyone knows the importance of customer support, but if you go through the extra mile for your customers, they’ll remember that and 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 as 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? At a whopping 73%, according to a study by Econsultancy, compared to 61% for emails and 44% for phones.
Having exceptional customer support is underrated.
We often take making a purchase a very easy and a straightforward process, especially if your site has great UX. But customers are always 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’ll come back to your site or go somewhere else. 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
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 as you get to better understand your target market.
In addition to improving your overall customer retention and customer support, you’ll be able to gain the gained insights and apply it to other parts of your marketing and business. After all, analytics and the data are the backbone of 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 better than silence on their part, because it gives you an area you can improve in. Most customers click away without leaving any feedback, so, take each of their comments (negative and positive ones) and see how you can capitalize on that.
There’s a lot to learn from criticism.
Once you build a close relationship with your customers, you can then ask and receive feedback. 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 – Gather social proof
Having a hungry and a loyal customer base is the dream for all businesses. But this is easier said than done since brand loyalty has been 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 from seeking an alternative.
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 # 4 – 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. So, 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, doesn’t mean they will a second time. But it’s a good idea to incentivize them anyway to turn them into forever customers.
This begins with continued interaction with your brand. So, first, get your customers to follow you on social media and make sure you’re offering high-quality value there so they stay.
Then, once you’re in their social media feeds, you have a lot 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.
So, feel free to get creative in that regard.
Customer retention management strategy # 5 – Personalization is key
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 and a personal hand-written note where you address 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 do 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 better keep track of your overall customer-relationship and retention management, consider investing in a CRM software. Use what information 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 that happens, you can employ the above 5 customer retention management strategies and invest in a CRM to better organize your relationship.
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?
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.