5 Ways to Drive Customer Retention
5 Ways to Drive Customer Retention
Did you know it costs a company 6-7 times more to acquire a customer than to retain them, according to research conducted by Bain & Company? Returning customers also spend more than new ones. McKinsey & Company reckon ecommerce spend for new customers is on average $24.50, compared with $52.50 for repeat customers. This is interesting, given so many marketing strategies are focused on recruitment rather than customer retention. It’s important not focus too much on wooing your customers to your product or brand without understanding what you need to do to keep them. That’s like taking someone to a fancy restaurant in a chauffeured limo on the first date, and Maccas on the second. Or not returning calls at all. Or suddenly becoming ‘too busy’ to fit in a second date. Nobody likes a flake.
So what is customer retention? Customer retention is keeping the customers you have by providing a great Customer Experience. Here are 5 ways you can keep your hard-earned, valuable customers to keep your bottom line in the black.
1. Do what you say you will do
Nobody likes to be duped. Don’t be the company who puts photo shopped images of yourself on Tinder only to leave your customers bitterly disappointed when they see the real you. Make sure your core product, service or offer is on point- you’ve done your research, identified your market and launched something that meets a need. Then make very sure that when a customer makes that initial purchase, that it does everything it says on the box. If you’re showing customers a mustard button up shirt with brown flowers on it, then deliver them a mustard button up shirt with brown flowers on it. Not blue flowers, as that would not look cool. Plus, you’ll have blown your customer retention strategy with this customer as they won’t be happy. Have integrity, and ensure there is no gap between what you say you will do, and what you do. Simples.
2. Understand the value of your customer
If a bloke lands on your website and buys himself a nice piece of ham for Christmas, after researching hams, ham prices and the most convenient place to get them, then that transaction is worth, say $60. A lot of companies put that in the bank and focus on bringing in the next $60 ham guy. But if you’re trying to drive customer retention, you need to look at the value of ham guy over the course of his life. We have Christmas every year, what if he liked his ham so much he came back every year for another one? What about other occasions throughout the year where he might like another ham, or maybe a nice chicken? Multiply this over a lifetime and ham guy is worth a whole lot more to you. So for every purchase, make sure you have follow up strategies to let ham guy know about the other products you have, based on this initial purchase. Take a big step back from the transactional thinking and treat each customer according to their true worth, or potential worth to you. This will probably make you more money. Thanks, ham guy!
3. Talk to your customers
We’ve talked about how customers can be worth a whole lot more to you than their initial purchase. The way to realise this value is to talk to your customers. Stay on their radar- send them special offers, use your data to send them deals on products they might like based on previous purchases. Make them feel special and important. Most importantly keep your brand top of mind so when the opportunity presents itself to them to purchase something in your category, you’re the one they think of. You don’t always have to be pushing a sale in your communication, follow up emails to ask their opinions on the product they bought can give you handy information, but also make them feel like you care, you listen and you will tweak things based on their feedback. Provide valuable content on your website and social platforms to keep your customers engaged. It’s all about being there, not in their face, but on the periphery, so when they are ready to buy again they don’t have to start all over.
4. Go above and beyond
Good customer service leaves your customer feeling satisfied. They had a problem or a question, and it’s been resolved to their satisfaction. High fives. But it’s pretty quickly forgotten by your customer, and when they decide they need to upgrade, try something different or buy the same again, you won’t be their go-to as you’ve not remained top of mind. We’ve spoken about staying in contact with your customers to drive customer retention, but the heart and soul of your company needs to be about going above and beyond for your customers. It’s not just about answering the question or resolving the immediate issue. It’s about following up quickly, no passing the buck, and making sure your customer is looked after during and after their issue, and beyond. Customer service needs to shift to customer experience… your agents should take ownership of each and every customer and realise their value over their lifetime.
5. Add value, always
Value isn’t just a good price for a product or service. Customers are a savvy bunch, these days. They have whatever information they need, at the touch of a screen, at any time. Most people have mountains of information presented to them each day. What sticks is information that adds some value to their lives. For example, you sell alarm systems. You have your product and price sorted. You’re competitive. Look at your data and use it to understand your customers, and what matters to them, and start producing content that resonates. Security is obviously important if they’re purchasing an alarm, so a blog on self-defence might be interesting. So might be links to insurance companies. It’s about thinking about what is important to your customers, and informing them, entertaining them and continuously cutting through the mountain of information by staying relevant.
Retaining existing customers will be worth more to your company in the long run than recruitment. Ensure your marketing strategy incorporates both recruitment and retention to realise the real worth of your customers. Hopefully these 5 strategies can get the ball rolling.
Need a game plan to win on the customer experience battlefield?
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