Everyone knows that the best way to increase business is by attracting new prospects and converting them into loyal customers. However, once a company has experienced exponential growth and has acquired a sizable portion of clients, marketers should try to look for ways to re-engage existing clients and convert them into long-term customers.
One misconception on existing customers is that they are naturally loyal and regularly exercise their spending powers after one encounter. Loyalty from existing customers should never be assumed, especially if companies have not put in the effort to engage and partner with them. Clients want an exciting customer experience above all, and ignoring this important aspect can have a drastic effect on whether they come back or choose to move on to the competitor.
Why retention marketing should be part of any global business marketing plan
Makes Upselling Easier
Upselling to existing clients is one of the most overlooked yet effective ways for a company to increase its revenue. Existing customers are 60-70% more likely to buy from a business they’ve already purchased from than a prospect, and they are willing to spend more as they develop a relationship with the brand. Companies need to practice active listening and assist customers on their buying journey. By doing so, trust starts to build, which puts companies in a position to find solutions to problems that the customers themselves might not fully identify.
Affects Spending Power
Existing customers are much easier to sell to, and it’s not difficult to figure out why. New customers need to be lured and convinced - current customers have gone through the experience and are 27% more likely to purchase again.
The length of time a customer has been shopping with a company also affects their spending habits. A study by Bain & Company showed that apparel shoppers were more likely to spend 80% more on their 10th shopping experience than their first. These statistics show that the potential and ROI of keeping existing customers happy cannot be ignored.
Creates Brand Ambassadors
People tend to value their friends’ and family’s opinions, which means existing clients play an indirect role in a company’s marketing and advertising. The more often a client comes back to a brand, the more comfortable they become with it, and the higher the chance they refer it to others. Statistics show that a whopping 92% of individuals trust word-of-mouth recommendations over ads and PR. Returning customers are great assets when it comes to getting the word out.
Brings Down Cost
Acquiring a new customer can cost five times more than retaining an existing one. It goes without saying that money spent on a customer retention plan is a smart and profitable business strategy.
Implementing Customer Retention Business Strategies
Implementing customer retention strategies does not need to be an elaborate and expensive procedure. Numerous strategies can be implemented, and companies need to figure out what works best for their customers. Below are a few ideas that any marketer can use and test out today.
Personalize the Message
Companies need to start to get to know their clients and provide them with a personalized customer experience. Data obtained should be used strategically to identify and solve their issues. Nowadays, customers want to feel listened to and know their needs are being met. Creating a unique customer profile will help send a message that resonates with clients. Little touches such as addressing customers by name in communication or sending birthday freebies are all good ways to remain on their radar without becoming aggressive and overbearing with your tactics.
Create a Loyalty Program
The ever-popular implementation of a loyalty program is an excellent way to retain and reward loyal customers. As we saw above, returning customers tend to spend more. Setting up a point-based system where clients can redeem them for high valued products or a membership level system is a great way to delight customers. If loyalty programs sound too complicated, something as simple as implementing a referral program will keep customers happy and spreading the word.
Bring Value Above All
In retention marketing, it’s important not to focus solely on the sales aspect. Customers want to know that their loyalty is not being taken for granted. Ensuring that they are carefully segmented is a great way to send them communications tailored to their needs and wants. Providing them with helpful content such as webinars or white papers shows a company’s dedication to keeping its customers happy.
Collect Feedback and Implement it
How customers feel about a business is vital for a company’s success; how can any improvement occur without feedback? By collecting information and feedback through customer surveys, polls, and reviews, companies can decide where to focus their efforts to improve customer satisfaction. It is best to keep it short and offer incentives for completing the form. Once the feedback makes its way back, it is time to carefully review the data and implement a new strategy from the results provided.
Analyzing retention marketing results is pretty straightforward and valuable in figuring out if the current strategies are successful or not, and what changes to implement.
Analyzing the results and determining similarities between churn customers can help with future marketing efforts by determining why specific clients might be less likely to stay. This might mean having to revise the ideal client and determine what attributes will lead to a higher retention rate.
Retention marketing is not an exact science and requires regular tweaks and adjustments. Companies also need to take into consideration the products and services they offer clients. A company selling lawnmowers, where lower purchase frequency is the norm, will need to implement a different strategy than a clothing or grocery store. Bringing a personalized customer focus approach is suitable for any business. Companies who earnestly implement customer retention strategies will see their efforts reap up all the benefits.