7 Customer Retention Strategies to Help Scale your Business
The ultimate goal of any business that provides products or services, is to make profits. And, business owners constantly seek for new ways to maximize their profits. In terms of profit maximization, customer retention is the key driver of growth and long-term profits. the act of finding and obtaining new customers is always a top priority. However, what many companies tend to forget is that once a customer makes the first purchase, there is much more to be done in maintaining the customer relationship. Smart businesses realize the first purchase is just the beginning; the real business value lies in retaining that customer.
Numbers don’t lie
According to a report by Bain and Company, a 5% increase in customer retention can increase a company’s profitability by 75%! Gartner Group statistics show that 80% of any company’s future revenue will come from just 20% of your existing customers. Further, Marketing Metrics say that it’s far easier to (about 50% easier) sell to existing customers than to brand new prospects.
The more customers you retain, the more likely you are to achieve your business goals.
Having said that, we need to look at the broader picture. Of course, retaining customers yields numerous benefits, but it also helps businesses achieve the following goals:
- Achieve better conversion rates: Existing customers have already bought from you, so if they had a good experience they will buy from you again. Trust has already been established and you know something about them already; therefore, it’s easier to identify their needs.
- Lower cost of marketing: You need to spend less time finding them and convincing them that you are the one they should buy from. In addition, existing customers can give you valuable feedback about your performance.
- Increase profits: Selling to existing customers will be less focused on price as opposed to new customers since you might not need as many discounts that you would usually use to attract new customers. And since your existing customers trust you, it may be possible to convince them to become interested in even more of your products or services through up-selling and cross-selling.
Customer Retention as a prerequisite for business growth
Despite all the research and studies that show us just how impactful Customer Retention is on business (ROI), it is yet to attain the status of “high business priority”. There is a severe gap in information in this regard which only data can fill. Just knowing what customer retention is won’t help. Company strategies should be created with the vision of improving retention and loyalty. The experience you deliver in your stores, on your website, mobile app, etc., should all build the customer’s affinity towards your brand. Given the plethora of choices that customers have today, unless there’s something about your brand that makes the customer want to come back again — it’s safe to assume that you’ve lost the customer!
Ways to retain customers
Some strategies and commitment to retaining customers can help your business experience real growth. A lot of these strategies do depend on what kind of business or industry you are operating, yet there are some unique ways to improve your customer retention rate that can extend to all businesses. For those who have seen the light, here are some customer retention strategies that can go right to your bottom line:
1- Offer your customer surprises
We all love surprises, don’t we? We tend to look forward to some kind of surprise on special days such as birthdays and anniversaries. When it comes to nurturing your customers, think of a valuable offer that you can make to your customers. Surprises are not planned, they’re sudden with an intent to show that you care, so they don’t have to cost you a fortune. It could just be a handwritten note, a personalized product, brand merchandise or simply an e-mail. It is basically offering something beyond the normal service or product that you offer. Surprise offers make your customers feel like they’re part of something bigger.
2- Improvise KPIs around customer service
Key Performance Indicators (KPIs) are the part of the roadmap that help companies visualize what the future holds for them and which direction they should be taking. By carefully studying your KPIs, you can tell what makes your customers happy. No doubt it is critical to deliver great customer service and make it easy for customers to access vital information and support. Until you’re passionate about your customers and dedicate time to engage with them, your business is likely to suffer.
3- The email strategy
You may already have data points such as what your customers have purchased or browsed. Use this data to tailor the content and product recommendations in your email marketing campaigns. Be sure to constantly test incentives and other factors to see which is the most effective.
4- Market to existing customers
Put as much effort into your current customer campaigns as you put into the rest of your marketing programs. Know your audience, grab their attention, focus on the offer, and measure your results. Use campaigns to nurture your customer relationships, encourage customers to buy again, identify customers who are at risk of defecting.
5- Avoid over-promising
Align expectations with your customers on a regular basis. Keep in mind that they only know what you tell them. Over-promising and under-delivering is an easy way to lose credibility. Improving customer trust goes a long way towards getting shoppers to love your brand — so keep everything right from product descriptions to promotional offers as accurate as possible.
6- Try creating a customer community around your brand
Many times, people don’t connect with your brand; rather they connect with other people that relate to your brand. Give those people a voice on your website to remind your guests they aren’t buying a “product”, they are buying their way into a community of like-minded people, or people they want to be more like.
7- Adding live support chat to your website
When it comes to winning the customer support race, live support chat stands first. It is the easiest and fastest way to engage and convert website visitors to customers. Live support chat not just helps in achieving customer satisfaction but also offers customer retention. It connects the customer directly with the customer support agent while allowing them to multitask, even if they’re waiting for the agent to get back and this is why customers are more likely to return to a website that offers live chat.
CONCLUSION:
The easiest and most predictable source of new revenue is right under your nose: it comes from the existing customers who already know your company and have already bought from you. The more customers you retain, the higher your profits will be.