Gaining new customers is and always will be important. But, what’s even better than gaining one new customer?
If you thought the answer was “more customers” then you’re unfortunately wrong. Bringing in new business is essential, yes, but retaining existing customers is actually even more essential.
What are new customers for if you don’t know how to retain them?
It’s true, the more returning customers you have the faster you can reach your business goals. In fact, organisations that increase their customer retention rates by as little as 5% can increase profitability by up to 95%.
Besides, keeping customers coming back is much cheaper than acquiring new ones. The cost can be up to 25x times less, which will result in a greater ROI.
So how do you retain existing customers and grow your business?
In this article we will cover 5 customer retention strategies that are being used by some of the biggest brands.
Read on if you want to get inspired and are ready to take your business to the next level.
1. Listen Up
Who better than your customers can tell you what makes them do business with you?! Listening to your customers and truly taking in their feedback can help you better understand how they feel about your business.
But not just that! Feedback from your customers gives you insight into their purchase behaviour, preferences and their values, providing you with valuable information.
This information also helps you recognise why customers might turn away from you and in what areas you can improve.
After all, customer is king (or queen ;-))! And to retain customers, they should always play a pivotal role in your decision making.
What to do: Create a process of collecting customer feedback by a customer feedback loop. It is a system for gathering, analysing and sharing customer reviews and surveys.
There are a few different methods of gathering feedback. Some of the most effective ways are online surveys or rating questions, which you can send out through automated email marketing. You could also ask customers to participate in focus groups or testing. Tip: A little incentive can go a long way.
2. Analyse Churning Customers
When you have plenty of feedback, it is important to analyse and track the information provided to see at what point customers churn. Or simply said, decide to stop making business with you.
I know I know, it sounds like a lot of work. But there are lots of systems and easy templates out there making this part super simple for you!
What to do: Make a template (or simply grab one like this one here) and start tracking your customer’s churn rate. It will help you better understand customer feedback letting you to decrease churn rate – and increase customer retention.
3. Keep in Touch
When trying to get more retaining customers, don’t forget about your existing ones! Even if customers haven’t reached out to you in a while or provided you with feedback, make sure to stay in touch with them.
Communication is key to maintaining positive customer relationships. Having an effective communication system in place will make sure that your customers are always up to date with your latest offers.
What to do: Ensure that all your communication channels are being well maintained and customer enquiries are not left in the dark. To stay in touch with your customers you can use systems like Electronic Direct Mail (EDM) marketing.
EDM marketing is an effective and powerful tool to keep your customers up to date with any offers, sales or promotions. You can reach out with exclusive birthday discounts, you-forgot-something-in-your-cart reminders or hey-we-haven’t-seen-you-in-a-while messages.
4. Do a Customer Retention Program
Customer retention programs usually consist of a combination of several tactics. The good news? There’s a program for every business case you could think of!
Firstly, what is a customer retention program? It is a specific approach to promote customer loyalty. And here is why it is important:
As we have figured out earlier, you don’t want to forget about your existing customers while being busy with retaining them. Honestly, they kind of work hand in hand. That’s why you want to make sure that no side comes too short.
What to do: There are several customer retention programs out there. Depending on your unique business case, you can choose one or a combination of a few. Here are two great ideas how you can charm your existing customers and improve your retention rate:
Customer Loyalty Program
It’s crucial that you remember to put in just as much effort for your existing customers as you do for customers who are about to churn. What will customers who are about to turn away from you think if they see that you’re not putting in any effort for your existing customers?
A customer loyalty program (for example offering rewards) is a great way to show appreciation to the customers who absolutely love your brand and are truly committed. Frankly, who doesn’t like to get rewarded when they shop?!
This will turn the heads of many sceptical customers making them realise that you truly do value your customers.
Corporate Social Responsibility (CSR) Program
Now more than ever, your business needs a strong CSR. You can’t simply offer a product or a service anymore, even if it was the best innovation anyone has ever made.
Customers want more – they want transparency. They want to know that you care and that what you say is really what you do. Can you guess where I am going with this…?
Integrity! Yes, it’s all about integrity. Ensuring that what you advertise and tell your customers reflects in your actions. No bullsh** but rather honest messaging.
You can strengthen your CSR in many ways, but a CSR program is one effective method. Think about your businesses’ values and beliefs, and set a moral goal. This could be that you want to switch to 100% recycled product packaging within a year, or that you will plant a tree for each product or service purchased.
Try to also get your customers involved in getting them to play a part in your process. Demonstrating your commitment in alignment with theirs will improve your customer’s experience.
5. Customer Education Programs
This is something that you have to think about especially if your product or service is quite complex. A customer education program helps your customers to fully understand how to set up, use or consume your goods.
The best way to do this is to create a mix of customer self-service tools. For example, you could have a knowledge base or Q&A page on your website. Even better, having short explainer videos available guiding through your customer step by step.
The customer education program can also be extended beyond your product or service. Say you offer women’s shoes, you can offer workshops or online tutorials covering topics such as caring for your shoes or how to style your shoes.
This approach has proven to enhance customer satisfaction and increase engagement. As a result, customers put more trust and confidence in your brand, wanting them to come back again and again.
Of course, there are so many more ways to increase your customer retention rate. While you discover the amazing benefits of retaining customers (less costs, more profit) don’t forget your existing customers. Ultimately you want to put in just as much hard work in retaining customers as encouraging existing ones.