Staying competitive in the digital age is not easy, as consumers are constantly bombarded with clever advertisements trying to convince them to buy from a different company or service. Without a strong retention strategy on your part, these attempts to entice your customer to buy elsewhere just might work. You’ve already done the hardest part by convincing a customer to buy once; your next task will be keeping them happy. You can succeed at customer retention by using some strategies that will maintain your customer’s loyalty.
Customer loyalty is a customer’s commitment to buying from you. Whenever they need something you sell, they come to you. A loyal customer will usually choose you over the competition because of your excellent customer service, unbeatable product selection, and fair pricing. Loyal customers are your most valuable asset, as repeat customers typically spend more and generate larger transactions. The average repeat customer will spend 67% more in months 31–36 of their shopping relationship than zero to six months. Source: Small Biz Trends
Customer Retention
Most companies focus more on acquiring new customers than customer retention. About 44% of companies focus on customer acquisition, around 18% focus on customer retention and around 40% focus equally on both. Companies who focus on customer retention save money, as retaining a customer costs roughly 5% less than finding a new customer. Additionally, growing business from a new customer to the level of an existing customer costs 16% more than an existing customer according to small business trends.
Repeat customers always make up a substantial portion of an organization’s profits because the more times people buy, the more likely they are to buy again. One study showed that after one purchase, a customer is only 25% likely to buy from your company again, after two purchases they are 45% more likely to make a third purchase, then after three purchases they are 54% more likely to make a fourth.
One study showed that by a shopper’s fifth purchase, they were spending 40% more than their first purchase and by the time the customer hit the tenth purchase, they were spending a massive 80% more.
Word of Mouth
Happy customers are more likely to recommend you to their friends and family. A customer’s loyalty is a hugely important factor in word-of-mouth marketing, and having a solid customer retention policy will include asking current customers for referrals.
Every business should have a customer retention strategy. This should look like a rough business plan with goals which will include time frame, the percentage of increased spend per customer, each customer’s projected referrals, and total cost of retention versus new business acquired.
Customer Retention Strategies that Work
Gifts and Discounts
People love to feel appreciated. You can easily surprise and delight them with gifts and discounts. Offer them a coupon or code for a discount on a product they frequently purchase, and be sure to include a short personable message from the customer service team.
Create a VIP list for your most frequent repeat customers, and send them VIP only discounts. Invite them to become part of a special club by asking questions that will give you more details on their buying habits.
Send them a card on their birthday, and a voucher for a product or discount.
Entice them to post their gifts to social media, as this will increase your brand’s exposure which can help attract new customers.
Excellent Customer Service
When it comes to customer service, there’s often a huge gap in perception; around 75% of organizations believe they are customer centric, but only 30% customers surveyed agree. A study from 2017 found that 8 out of 10 customers are so frustrated by poor customer support that they’re willing to pay more to have a better experience.
Boost your customer service:
- Be consistent – provide a consistent experience, customers should feel they’re getting the same care and attention despite the amount they spend, or if they are communicating with you via phone, email, or messaging.
- Excellent communication – utilize various channels to accommodate email, phone and chat messages, requests and concerns.
- Customer experience – use software tools to route the right knowledge agents to the customer’s needs.
Rewards Programs
Everyone offers a rewards program, but not everyone lets customers actually benefit from it. Show the customer examples of how the program will help them, and make it user-friendly. Encourage sales associates to explain the program, and give the customer a reward the day they buy and sign up for it. Use the program to learn more about the customer and their buying habits.
Referrals
Many technology companies will offer a 10% finder’s fee to customers who provide referrals when their referral signs up for service. Other programs include ‘Give $10 and Get $10’, or reward points for every friend a current customer recommends to your company. Also use social media and if someone likes a post from a VIP customer, offer to send them a special promotion.
Example: “If you refer a friend to the Casper mattress, you’ll receive a $75 Amazon gift card, and your friend will receive 10% off their mattress”.
Point System
Reward points on purchases are another feature you can offer your customers. Starbucks rewards their customers with two stars for every dollar they spend, they can earn different rewards at different levels and there are opportunities to collect bonus stars.
Customer Surveys
Surveys can help identify patterns you have missed, so when possible, send your customers a quick online survey to complete. Include multiple-choice questions with text answer fields for more thorough answers. Send surveys when a customer makes a purchase, or has their service implemented, or send random surveys when they haven’t made a purchase in awhile.
Belong to Your Community
Involve your company in social development projects in your town or city. You could also write a blog on how to use your product for something important to the safety or culture of your town. Be creative and find out what needs your town has that you can help with.
Customer Onboarding
Educate your customer on the products and services they are purchasing. Have a project or product manager send them an email with a short tutorial on how to use the product. Include your customer service team’s contact information for when they need help with repair, billing, and general questions.
Know Your Customerfi
Use the data you collect on your customers to improve their experience. Find out how they like to be contacted, ask about the product or service they ordered last time, and show genuine interest in their needs. Be personable.
Encourage your sales and customer service teams to spend more time with customers via their preferred method of contact. Provide bonus incentives for answering customer service issues quickly and effectively. Get creative, and have fun trying out new ways to engage your customers in different processes of the business. You will find that many customers will feel special for being included. Have fun with it! Check out the book Never Lose a Customer Again.
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