All business owners and marketers want their target audience coming back and purchasing their products and services on a regular basis. After all the goal of customer retention is to help companies retain as many customers as possible, often through customer loyalty and brand loyalty initiatives.
Most companies fall into the trap of spending more money on getting new customers because they view it as a quick and effective way of increasing revenue, however for most industries this actually costs more than simply marketing to the customers you already have.
Selling to customers with whom you already have a relationship is often a more effective way of increasing revenue because companies don’t need to attract, educate, and convert visitors into customers. Did you know, according to studies done by Bain and Company, increasing customer retention by 5% can lead to an increase in profits of 25% – 95%, and the chance of converting an existing customer into a repeat customer is 60% – 70%. As you can see the statistics stack up in your favour.
Typically, before you start thinking about marketing strategies to keep your customers interested, you should set realistic expectations. Many companies set their customer expectations early and a lower than they can provide to remove uncertainty about the level of their service and ensure they always deliver excellent results.
For example, let’s say you set your standard delivery time-scale at 6-7 working days, however you know it can be delivered within 5 days, this means you’ve excelled and easily matched your customers’ expectations.
Another fantastic marketing idea is to create a loyalty program, this simply means you reward your customers by giving them incentives to come back and shop with you on a regular basis. Many supermarkets and department stores do this for a good reason, that’s because it works well for most industries.
Of course, it goes without saying that most customers will come back to you time and time again because of the high-quality customer service they have received. Going above and beyond will build strong relationships with your audience and build long-term loyalty by paying attention to their needs and issues.
Remember this not only helps to increase sales it also helps to build trust, by building trust you can get even more customers as your existing clients will tell their friends and family of the excellent experience they receive.
In addition to this, as well as offering excellent customer service you also need to keep a close eye on complaints. After all, customer retention depends on customer satisfaction. If your customers are unhappy with the service that you provide, why would they come back and purchase from you again?
This means that every complaint you collect is like a mini customer satisfaction survey, this information can be invaluable to improve your customer retention rates. Some businesses even encourage their customers to submit a satisfaction review, either through a suggestion box or through their website.
Many marketers also like to focus on the data too, for example you’ll need to review the lifetime value of your customers. There’s a huge difference between the one-off profit you might make on a regular sale, which ignores the larger picture, and the total profit your average customer represents over the lifetime of their business relationship with you.
Once you know how much combined profit a customer represents to your business when they purchase from you, over the months, years or decades, you’ll understand the vital importance of taking good care of your customers. And because you’ll understand just how much time, effort and cost you can afford to invest in retaining that custom, you’ll be in control of your marketing expenditure more easily.
Let’s say Lisa spends £1,000 a year with you, however she’s been using your company for the last 10 years, that means she’s spent a total amount of £10,000. However, it only cost you £1 on advertising to convert her into a customer. As you can see, this advertising expense on social media has gained your company a lot of money in the long-term. Whereby you may have spent £1,000 dollars on another advertising channel and not had one customer at all.
One of the major points to remember with customer retention is the simple fact many businesses don’t market themselves in align with their customer needs, interests and habits. If you have nothing which interests a customer, how do you expect them to purchase from you?
For example, many companies attempt to promote additional or similar products to their customer base, normally through email marketing – however, how many times have you noticed the products don’t even relate to the original item you purchased. It happens quite a lot, businesses then wonder why their sales are decreasing and their audience isn’t interested. It’s important that you assess why your customer base liked in the past and align your new marketing efforts to their interests, not yours.
Of course, one of the best pieces of advice to give, is to simple be honest. People are extremely quick to lose trust and confidence these days and after all, there’s loads of different companies they could probably use at the touch of a button. Whether that be through faulty products, confusing returns policies, unknown charges and so on, don’t give your customers a reason to not trust you. This is a sure-fire way of them not returning to you in the future.
Try to treat your customers how you want to be treated – this is one of the greatest ways to improve customer retention rates for businesses across the world.