The simplest math of all tells you as a business owner that more customers mean greater profits. While this little slice of wisdom does stand true in isolation, it comes with a wide range of buts in the actual business world, pardon my business French. What this means is that customer acquisition does play an important role in increasing revenue for brands, but the cost of customer retention and its effect on overall revenue may be a much greater goldmine than most companies realize.
You’ll like these numbers: it can cost five times more to acquire a new customer than it does to retain an existing one, while even a slight increase in retention (we’re talking 5%) can lead to profit increases as high as 95%. Now that’s proper budget allocation. So, if you have the opportunity to invest more in a strategy that will yield higher profits and ultimately improve customer acquisition as well, let’s focus on boosting your retention strategy through the best and the brightest methods available today.
Utilize customer feedback to your advantage
Brands know that Google likes to see feedback. They use it to rank your business better, to understand how your customers respond to your brand, and to see how relevant your offers are to others looking for a product or service from your own selections. If you set out to reach a certain standard, and your customers confirm that you successfully do just that, your ranking has the potential to soar. On the other hand, this is certainly not the only reason to ask for or publish testimonials.
In fact, anonymous surveys and other means of collecting feedback directly from your customer (think emails and even phone calls after they get in touch with you to order something) are an invaluable source of information. You can and should leverage that information to discover how your business can improve. Then you can go that extra mile and notify those customers on the ways you implemented their feedback and made changes – they will feel valued as a result and feel more loyal to your brand.
Gifts and surprises to exceed their expectations
A little can go a long way, and this simple retention strategy is a perfect example of that old adage. In the case of customer retention, symbolic gifts, as inexpensive as they may be are truly valued and appreciated when they are purposeful and meaningful. Brands rarely get the opportunity to interact with their customers face-to-face, since most of our communication happens online today.
When you do get a chance to be in the same room with your customers, at an event such as a conference or a launch party, it pays to be prepared. Giving your customers branded promotional products during an event will help them remember your brand, talk about it well after the event is over, and ultimately increase your word-of-mouth marketing by sharing their impressions with others.
When the gift is unexpected, such as if you send a branded or personalized flash drive together with their order and a thank-you note – you give the gift a whole new meaning and purpose. Few things can drive loyalty such as these small tokens of appreciation when they are handed in the right moment to the right people.
Build relationships, not flings
If you expect loyalty from your customers, which is at the core of retention, then you need to let them know you’re in it for the long haul. That means that a one thank-you email after they’ve completed their purchase will not do the trick. Just like anyone who wants to be pampered (which is practically every single customer out there), you should use every opportunity to show them attention. Is their birthday coming up? Then send them a personalized discount for an online purchase on that day.
Send them a piece of content that you know will be useful for them, such as a special how-to piece for wearing the latest trends (preferably the ones that fit with your store’s clothing line). If they have been loyal for a certain amount of time, or they’ve already made several purchases with your store, let them know that you appreciate their business. Ongoing communication with a personal touch has the power to build long-lasting bonds between brands and their customers.
Look inward and use your employee base
Your internal retention rate is an excellent reflection of the potential your brand has to improve its customer retention rate. If your employees are eager to leave you for a better salary or slightly better work conditions, then you’re not giving them a reason to stay loyal to your brand despite the alluring check they’d get from your competitor.
On the other hand, engaged employees that share the values of your brand are your most important asset in making your customers happy and engaged. They’ll provide a stellar customer experience, while your teams will naturally be your brand ambassadors and your greatest advocates even outside of the office. If your teams share your vision and purpose, you’ll have the ability to connect to your customers on a much deeper level. Make sure to keep your employees engaged, and customers will suddenly be swamped with reasons to stay loyal to your brand.
Customer acquisition will always play a vital role in growing your business. However, by focusing on customer retention with the right techniques, you effectively allow both of these brand growth strategies to thrive. Use these methods to boost retention and make sure to always step up to the learning curve!