A Guide to Customer Retention (It Costs 5-7 Times More to Gain a Customer than to Keep One)
Have a Plan to Retain Your Current Customers
Whatever type or size of business you have, customer retention should always be one of your top priorities. Business owners and managers tend to believe that providing great services and products means that customer retention will essentially take care of itself. This is not generally the case, so there must be a continuous effort made by your company to keep the loyalty of your existing customer base, which is one of your most valuable assets.
Of course, you should always be looking to attract new customers to your business through the various advertising and marketing campaigns that you find best serve your company’s needs. However, existing customers represent your simplest source of new revenue, since they are already familiar with your company and what you have to offer. Also, achieving excellent customer satisfaction will attract new customers organically, through positive word-of-mouth and referrals. It is far more lucrative to cultivate what you already have, as various studies have discovered that it costs between 5-7 times more to acquire a new customer than to simply retain an existing customer. We’ve compiled a list of ideas and procedures for you to consider when creating your company’s customer retention plan.
Make sure your entire team is aware of the company’s expectation to retain customers, rather than seek only one-time sales. There is a strong link between employee motivation and customer retention, so you must find ways to keep employees motivated to provide the service needed to retain your valuable customers. Excellent customer service should always be a company-wide goal, as it leads to high levels of customer satisfaction, then retention.
Prioritize Service After the Sale
Work on providing top-notch customer service after the initial sale has taken place. This is the time when the real work begins as you look to prove to your customer that they made the right choice by purchasing your product or service and limit the chance of buyer’s remorse. Do all you can to make them feel a connection to your company and your products with personalized follow-up to let them know their business is important and appreciated. Whether a handwritten postcard thanking them for their business or an email that includes tips on utilizing your products, always contact the customer after the sale. This is a step in the right direction to foster customer loyalty to your brand.
Develop some type of customer loyalty program to provide added benefits to your existing customers. This could be a punch card that offers a free product or service after a pre-determined amount of money spent or number of visits. On a larger scale, such a program might include special sales, limited edition products, and VIP customer appreciation events. If you utilize a customer email list, ask for birthday and anniversary information during the signs up, so you can further personalize communication with you customers by offering well-wishes or special gifts.
Communication Invites Feedback
Create easy ways for your customers to offer feedback on your product and their experience with your company. This could start as a suggestion box or access to a company email address and expand to web-based satisfaction surveys, focus groups, and product reviews as your business grows. Any feedback that warrants a response should be taken care of in a timely manner and you should carefully consider any questions or issues that may arise. Address concerns and work diligently to use the feedback you receive to improve the overall customer experience you provide.
A closely monitored social media presence is a great tool to keep your business connected to your customers. If you have the capacity to be active on several platforms, that is ideal. If your resources are more limited, choose one or two platforms to interact with and engage your customers on a regular basis. Through social media, you can make special offers like discounts and promotional items, to those customers who follow your accounts. Also, your customers’ positive feedback through social media is a great form of immediate free advertising to further promote your products.
Negativity Can Create Opportunity
Since social media platforms allow your customers to provide immediate positive comments and reviews, negative feedback is bound to happen as well. When the inevitable mistake occurs, apologize swiftly and sincerely, while doing everything you can to make the situation right for the customer. Have procedures in place for quick conflict resolution so relationships with loyal customers will be maintained. Even issues that may be beyond your control can be explained and properly handled through open communication and you can use such instances as a way to move forward with a stronger customer relationship. For more tips, read our article on ways to help a disgruntled customer.
Consider a Cause
Find out what causes or charitable organizations are important to your customer base and offer to donate portions of profits during special sales or on particular days. Hopefully, your business will be successful enough to expand such programs over time. Taking some social responsibility within the community where you do business is a win on many levels, but it certainly shows your loyal customers that you want to give back in appreciation for the success you have received through their patronage.
The Forbes Business Development Council has more customer retention tips here.