The biggest marketing cost most small businesses face is that of acquiring new customers. Few business owners, however, pay anywhere near as much attention to customer retention, even though keeping an existing customer for longer is a far easier way to grow revenue.
The Customer Insights Group found that on average it costs companies five to seven times more to find a new customer than to retain an existing one. Another study by Bain & Company found that a mere 5% increase in your rate of customer retention can boost your profitability by as much as 25% to 95%.
Plug The Leak First
Seeking growth without a robust customer retention strategy is rather like struggling to fill a jug with water while ignoring a hole in the bottom of the jug. The 10 techniques below will ensure that you plug that leak and keep your customers happier, and for longer. Before we begin, there’s one key performance indicator that you must bear in mind.
Know The Lifetime Value Of Your Customers
It’s a good idea to keep tabs on the average lifetime value of your customers. In other words, how much does a single customer spend with you over the course of your business relationship?
Once you have this figure clearly in mind, you’ll be able to measure the effectiveness of the following 10 strategies and double down on those that work for you.
Strategy 1: Re-Engage With Your Customers Often
When you regularly find reasons to get in touch and let them know they’re valued, your existing customers will grow to trust and feel loyalty to your brand. Frequent post-purchase communication not only helps to retain customers, it also alleviates post-purchase regrets, and draws them back in to buy more often.
There are many ways to go about re-engagement. A bi-weekly email newsletter packed with value is one excellent method. You could also send out special offers, tips, surveys, and links to useful resources or videos. If you have a blog, you can send them a quick notice whenever you publish some helpful content.
Consider other ways you can humanize your brand and nurture a dialogue between you and your clientele. Many businesses find that live webinars work wonders. You could even start up a regular podcast with industry news, expert guests, and instructions on how to use your products and services.
More Channels, More Engagement
Aberdeen Group found that companies with strong omnichannel engagement systems retain 89% of their customers on average, compared with only 33% retained by businesses with weak engagement systems.
|Related: Five Ways to Improve Omnichannel Customer Experience|
With this in mind, think of all the apps and channels your customers use and aim to become highly active on all of them. Over time, you’ll find out which social media platforms work best for you, be it Facebook, Instagram, Twitter, or something else. Whichever you use, always encourage as much audience interaction as possible.
And remember, you aren’t limited to digital. Sending out physical thank you cards or special offers and little gifts by mail also goes down nicely. This is especially true given the rarity of physical mail in this online day and age.
Strategy 2: Use a Communications Calendar
To efficiently manage all this additional communication, it’s important to use a good calendar. As with any kind of content marketing, regularity and consistency are the keys to success. You could even provide a copy of your calendar to your customers, so they know what to expect.
A calendar will also make it easier to automate the degree of your communications. This way, you can use a marketing automation tool like Marketo or Pardot to take some of the publishing weight off your shoulders.
Strategy 3: Reduce Response Times For Customer Queries
Everyone loves a prompt answer to their queries. Zendesk reports that 89% of people rate quick response time as an important factor when deciding whether or not to purchase.
Do all that you can to speed up the response time of your customer service interactions, be it live chat, email, phone calls, or social media comment replies. To some degree, you can also speed this up with a little automation.
Strategy 4: Have Friendlier Representatives
Friendliness of customer service representatives is another huge factor in customer satisfaction. Apart from employing the right people, you can utilize scripts and training to make them friendlier. Also set up reliable systems for gaining feedback on each customer service interaction, so you can tweak and improve over time.
Strategy 5: Set Up a System For Handling Complaints
A customer complaining is a customer about to leave and go to your competition. If you can increase the percentage of customers who have their complaints resolved in a satisfactory way, you will hugely increase your customer retention rates.
Ensure that issues are resolved in a prompt, cost-effective way, with some of your best-trained employees on the job. Such systems should also keep a record of common issues, to help you continuously improve your service.
Strategy 6: Surprise Your Customers
Everyone likes pleasant surprises. That wonderful little thrill that you feel stays with you, associated with the one who made you feel it. It needn’t cost you an arm and a leg to send little surprises to your clientele, just to let them know how much you value them.
A gift card on their birthday is always a nice one. After a call, you might send a handwritten note through the mail thanking them for getting in touch. If you’re sending out a package with a higher-ticket physical product, you could throw in some homemade cookies, or an additional lower-cost item, free of charge.
Strategy 7: Personalize Your Communications
Cisco reported that 69% of people are happy to give up more personal information in exchange for more personalized service. People love personalization. Think of ways you might make all your communications more personal to the individual and their unique circumstance.
One excellent way to create this effect is through segmentation of all your clientele. This means categorizing your database of prospects and customers into separate groups and mailing lists, based on various characteristics.
These groups might be determined by what they’ve purchased from you in the past, how long they’ve been your customer, where they live, what their product preferences are, related hobbies, or any other factor.
You can then send highly relevant messages that feel truly personal, because they are. The result is happier customers who spend more and stay longer.
Strategy 8: Build Trust With Consistency
Nothing is more important for loyalty than trust. If a customer comes to truly trust your brand, they’ll stay with you forever. Of course, you can chiefly build trust through the consistent quality of service and product.
On top of that, under-promise and over-deliver in all your interactions. And when you slip up, own it, and move heaven and earth to make it right.
Strategy 9: Build Trust With Social Listening
You can also build trust by demonstrating consistently that you know your customer better than your competitors do. This requires careful social listening.
Social listening is the process of paying very close attention to what your customers are saying about your brand online, behind your back, so to speak. Closely monitor forums, industry groups, and comments on all platforms. Analyze and act upon what you learn, whether it’s positive or negative.
You can also show your customers directly that you want to have very open channels of dialogue with them. Frequently solicit their feedback with surveys, quizzes, call-ins, and Q&A sessions.
Strategy 10: Use Testimonials To Reinforce Their Trust
There are few more powerful marketing tools than positive reviews, testimonials, and case studies. These are also, in fact, very effective customer retention tools. When a customer sees that others are also delighted with your brand, their own positive judgment is reinforced.
Share your positive feedback with them, via email or social media. Let them see they’re part of a growing community of loyal, loving fans.
Customer retention is all too often an overlooked and undervalued area of small business marketing. But with the above 10 strategies, you’ll be sure to plug any leaks, boost the lifetime value of your customers, and reap rewards in long-term revenue growth.
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