Contrary to popular belief, you don’t need to invest half of your budget in ‘flashy ad campaigns’ or a new sales team in order to build your customer base. The real secret to longevity and expansion for your business may just be customer retention, rather than attraction.
Customer turnover, or “churn”, can be more costly than it first appears.
According to the American Marketing Agency, the average business loses 10% of customers on a yearly basis by failing to nurture existing relationships. When a business focuses purely on acquisition, it limits its growth and therefore may experience financial difficulties further down the line, by having to continually invest in new sales strategies.
But how do you ensure a customer keeps coming back to you, time after time? How do you maintain their interest in a crowded marketplace of competitors with catchy sales pitches and low prices? Here are our tried and tested ways to build your customer loyalty.
Taking the time to understand your client’s business demonstrates your commitment to them as a brand. Only by really knowing the company’s history, its challenges as well as its goals, can you provide the most comprehensive and tailored service. Such personalisation makes consistent results more likely, helping to ensure your customer renews their contract with you.
By dedicating time and effort to immersing yourself in your client’s business long after the initial sale, you get the opportunity to become an integral part of their vision and business strategy. Keep providing invaluable support, and you become indispensable.
Part of building this vital relationship with any business is to set realistic expectations from the beginning of your agreement. Customers will remember negative experiences, so always make it your aim to under-promise and over-deliver rather than the other way around. Similarly, small to medium businesses are becoming increasingly reliant on outsourcing and external services, so make yourself an expert in their field. By truly understanding both your customer and their industry, you can cultivate shared values, such as their direction and success, aligning your mutual interests.
Loyal and repeat customers deserve better deals and discounts than new prospects, but this is not how the majority of businesses actually operate. Many companies spend the majority of their budgets on value add-ons and incentives designed to entice new customers, who have not yet shown any loyalty to them, only to abandon them if they cross that first hurdle. If your CPA (cost per acquisition) is at an unsustainable level it’s time to consider your cost per retention, which as you have already converted these customers, can be potentially much less expensive than your CPA.
Reward loyal customers with superior service, rates and quality. Measure your opt-out or customer lapse rates and provide unmissable deals or rewards at these essential touch points to avoid or minimise drop-off. Make your customer feel important and exclusive by offering one, two, or three-year incentives. Consider rewards schemes or a system built on points accumulated over time— such strategies will help you to stand out from your competitors and will also build and maintain customer trust.
Customer retention is really another term for customer satisfaction. Keep your customers happy and then they will keep coming back to you; it’s as simple as that. The best way to make people happy is to listen to what they want, and respond accordingly.
Using customer surveys allows you to pinpoint pain points and target them, ensuring your customers feel you’re listening to them and their needs as a business. Surveys also allow you to identify potential areas of dissatisfaction in high-risk customers before they leave, so you can constantly evolve and improve your product or service. However, as your company grows, it’s important to know how to manage your scalability. Most customers appreciate a large company that delivers a “small company” service that is personal and genuine, even when you are experiencing high growth.
You can incorporate any customer insights you gain into your relationship marketing strategy. Don’t just include existing customers into your general marketing communications – they need specifically targeted information and calls to action. For instance, instead of introducing them to your business again and again on a mass marketing email, serve up relevant information such as expanded services or developments which would be of specific interest to them.
In reality it is not enough to implement a customer retention strategy; to really ensure results it must become a culture, an essential pillar of how you conduct your business. Take all criticism onboard and use it as a learning – in this way, even if you do end up losing a customer from time to time, you learn from the experience. And, you are much less likely to lose the next one.