How To Improve Your Customer Retention
It’s a well known fact that acquiring a new customer costs a business much more marketing dollars than retaining an existing customer. And that’s before you even account for upsells, referrals or reviews they may provide as well!
Check out these mind-blowing stats that will paint an irrefutable case for working to improve your customer retention.
● Acquiring a new customer can cost five times more than retaining an existing customer.
● Increasing customer retention by 5% can increase profits from 25-95%.
● The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
● Loyal customers are 5x more likely to repurchase, 5x more likely to forgive, 4x more likely to refer you and 7x more likely to try a new offering.
● U.S. companies lose $136.8 billion per year due to avoidable consumer switching.
● 33% of customers will consider switching companies after just one instance of poor customer service.
To say that the most lucrative, and often the simplest, way to boost your bottom line is to improve your customer retention is an understatement, but surprisingly, many small businesses are missing the mark… and some are outright ignoring customer care and retargeting completely!
So how do you go about creating processes that will help your business to retain the customers you spent so much time and money earning?
We’ve got some simple strategies you can implement to increase the likelihood that a customer will do repeat business with you. And some additional tips on generating referrals, reviews and social proof through your existing customer base.
1. Have Great Customer Service – If one bad experience is enough to turn away your existing customers, you have to absolutely nail it in the service and support department if you want to profit from higher customer retention.
Good customer service is so much more than polite and accommodating staff. It’s also anticipating the needs of your customers and meeting them BEFORE they even realize they had them. Provide useful resources such as videos, manuals, blogs and newsletters to help your customers maximize their purchase. Tell them when they are due for a renewal. Suggest complementary products or services based on the business they are already doing with you. And never try to sell a customer something they don’t really need!
It’s also really important to have very clear policies that are communicated to the customer (and your entire team) effectively. You’re sure to have a frustrated client if the salesperson tells them one thing and the service team tells them another. Be sure everyone involved in the entire customer lifecycle is on the same page and the customers also get straightforward, honest information upfront. And when miscommunications, errors or issues do occur, allow your team to be flexible and use their sense of empathy and common sense to resolve the situation.
Losing a dollar today is not worth the potential loss of a loyal customer.
2. Create a Customer List – This might seem like a no-brainer, but we see this foundational step missed all the time. No matter what your business is, collect your customer’s email addresses and permission to contact them. This is becoming more and more crucial as privacy laws alter the way you can market to your current and potential customers.
3. Onboard Well – All products and services have some level of knowledge required to utilize them, especially if yours has any tricks to it, or the use is not common knowledge. Be sure that a customer knows all of the details required to make an informed purchase, that you give them all of the anticipated care and/or use instructions they need and that they understand how and when to follow up. And then check on them throughout the process. This will be more frequent in the beginning and will taper off once you have a good knowledge base set up. Don’t forget regular reminders are still important once they are an expert.
4. Consistently Communicate – Whether you use a newsletter, email blasts or go Live on social media, make sure you are regularly keeping in touch with your current customers to provide them support with their existing purchase including tips and tricks. You can also include opportunities to repurchase, try new products or services and so much more. There are so many ways to cover this base, just be sure you’re communicating in general and that the frequency is consistent.
5. Use Social Media To Your Advantage – You can create a loyal customer base using social media. Encourage your customers to follow you on social media by offering valuable information, engaging content and information they won’t get elsewhere.
Social media provides an excellent chance for customers to refer you, to build social proof and to gain new customers. You can also target your existing clients with advertising that will bring them back for repeat sales or engage them with new products.
6. Offer Exclusives – There is nothing more frustrating than when you realize there are big discounts, trials or bundles available to new customers that the existing customers can’t have. Be sure to offer your best discounts, events, gifts and perks to your existing customers first. This is especially effective if you pair it with an opportunity to try a new product or service at a discount or to bundle it with their next purchase or renewal.
7. Collect Feedback – And Use It – Collect feedback from your customers using surveys, feedback forms and even anecdotal information from your client-facing teams. Assess the feedback you receive and implement any updates, upgrades or changes that can improve your product, service, processes or the overall brand.
If a customer takes the time to tell you how you can improve, that is of significant value. Treat it as an opportunity to wow them, and others like them who would likely see the same gap, and get ahead of their needs and desires.
8. Get Out There – The most important thing to keep them coming back is remaining top of mind with your customers. Email them. Do fun, attention-grabbing things on social media. Create a community for them to belong to. Advertise where you know they are. Support the causes that matter to them. Get involved.
Okay, so now you have a following of loyal customers – Other than repeat sales, what else can you do?
Referrals, reviews and social proof are another big way that your existing customers can dramatically increase your business. These can also help you reduce your first time customer acquisition costs by building trust much faster.
More reviews are a very easy way to boost your company profile and lend more trust to your brand, not to mention the SEO boost that you get from search engines like Google!
Getting more reviews is as simple as asking for them. Put the link to your review page on your email receipts, include it in your newsletter, try a QR code for easy access in your waiting room. Wherever your customers are interacting with you, make it quick and simple for them to share their experience.
PRO TIP: Always ask for the review very close to the time of the customer’s recent purchase to ensure it is still fresh in their mind and they are feeling great about the wonderful service they just received.
Referrals can be tough to encourage because you don’t want existing customers referring people for their own benefit. It’s best to encourage referrals because your customers genuinely believe that they are doing good for the person they refer.
You can start by asking if they know anyone else who would benefit from your service or products. Ask this during the initial sales process, during onboarding and shortly after they make a purchase (or repurchase) with you. Add the call to your newsletter, include it on social media and discuss it with them in person.
Social proof such as testimonials and collaborations can also help you to increase the number of customers you retain and when you’re establishing trust to earn a new client. Post testimonials and reviews on your website and social platforms. Share them in your newsletter. Encourage your followers to share your content. Collaborate with key players in your industry or in your local area. Get them talking about your product or showing up at your location.
Every business is unique, but there are many simple ways to encourage a higher rate of returning customers who will sing your praises and help you attract new business. The key is to build a solid foundation of amazing customer relationships. Then expand on that based on what will best engage your customers and give them the support they need. Once you’ve won them over, all you have to do is ask in a way that is easy for them and they will give you all of the reviews, testimonials and social proof you need!