In a world of seemingly endless competition, where consumers and potential clients have limitless choice, skillful marketing is now more important than ever in the battle to win customers. But winning a sale from a new customer, although good reason for celebration, may be just the first step in the process of establishing a new customer relationship. Here’s something to ponder:
The cost of acquiring a new customer takes around 25 times the cost (and effort!) of retaining an existing one. The Value of Keeping the Right Customers (hbr.org)
A 5% increase in customer retention can create a 25% increase in profit. Prescription for Cutting Costs (bain.com)
With remarkable outcomes like these, it makes sense to focus equally hard (if not harder) on customer retention strategies and reducing the endless cycle of replacing departing customers with new ones. Businesses must aim to keep loyal customers with excellent customer service who purchase again and again, and become great brand advocates.
Do You Know Your Customer Retention Rate?
Imagine your customer base as a bucket with a hole in the bottom. No matter how quickly you fill it at the top, it will never become full unless you plug the hole. So how can first-time customers be turned into satisfied and repeat purchasers? Let’s assume the first hurdle of value proposition has been negotiated. You have found the right mix of quality, service and price for your target market and your current customers like what’s on offer. Now the real work begins.
Make a Good First Impression
As the old saying goes, ‘you only get one chance to make a first impression’ and the quickest way to lose a first-time customer, is at the initial point of contact. It can be something as simple as an unanswered call or a neglected email, or, more serious, a bad experience or faulty product. Either way you can say goodbye to what otherwise may have been a life-long customer and brand ambassador. It goes without saying that it’s essential to make a positive first impression, with excellent customer service, when on-boarding a new customer to your business.
It may not always be possible to follow-up the first engagement with a phone call, but if it can be done, there’s no better way to impress your new customer. However, if you can’t go the extra mile, in these days of CRMs, social media and automated emails, there are plenty of ways to get customer feedback. Whatever measure is used, it’s an important gesture that says, ‘we value your business.’
Having successfully eased your new prospect over the first hurdle, it’s now time to focus on the things that will keep them engaged and coming back for more. Your business needs to be front and centre in their thoughts. Balance is important here because nobody wants to receive endless, meaningless spam, but a well-crafted newsletter or product support information delivered regularly, will keep you in their thoughts, especially if it contains incentives such as discount codes or special offers. The same goes for periodic blogs and an active social media presence, reminding your customers you are still there for them.
Communication Is a Two-way Thing
Although your outbound communication is important, making it easy for them to communicate with you is also essential. This means having multiple channels open, so they can use a time and method that suits them. Typically this means email, website contact forms, social media messaging and phone. Whatever means, a prompt and helpful reply goes a long way towards securing their business into the future.
It’s Always Good to Say ‘Thank You’
Now you have them coming back for more, how about saying ‘thanks’ and rewarding them with a great customer loyalty program? Think of the coffee card you probably have in your wallet: after 5 cups, the sixth is free! It’s nothing new, but it works because everyone likes to be rewarded. There are many ways of replicating this reward process, such as accumulated ‘points’ or VIP status linked to offers (think Frequent flyer), that will have a huge impact on your customer journey. Whatever the process, there can be no doubt that a customer loyalty program goes a long way to ensure customer satisfaction. Customer relationship expert and author, Blake Morgan, has listed 50 statistics about reward programs that provide persuasive proof of their importance. Some we found interesting :
- Less than 8% of consumers consider rewards are ‘not at all’ important when purchasing – that means 92% think rewards are important!
- Loyalty leaders can grow their revenues at around 2.5 times faster than their competitors.
- 79% of customers agree that loyalty programs will make them more likely to continue buying from the brand.
- 73% of consumers are more likely to recommend businesses with loyalty programs.
- The other stats can be found here : 50 Stats That Show The Importance Of Good Loyalty Programs, Even During A Crisis (forbes.com)
Happy Customers = Great Brand Advocates
Keeping your customers happy is a great way to retain them, but what about the unhappy ones? Dealing with a complaint quickly, effectively and generously can turn an unhappy customer into a loyal brand advocate, if the complaint is handled in a way that not only satisfies them, but exceeds expectations. We, as consumers, all understand that negative experiences can happen so when a customer complaint is handled well, they will appreciate the effort taken to rectify the issue. Consider changing your mindset around dealing with a feedback so that it’s not a chore but an opportunity to impress and retain a valued customer.
Customer Retention Is About Establishing and Maintaining Relationships
To be successful in retaining customers, it is essential to monitor trends in customer behaviour and react accordingly. Most important of all, however, is to make ‘great service’ a core value that permeates the culture of the organisation. This is best summed up by e-sales entrepreneur Tony Hsieh who remarked, ‘customer service shouldn’t just be a department, it should be the entire company.’
And if you want to explore and discover new trends in customer retention, contact us at District32 for more.