When it comes to running a business, there are few strategies more important than customer retention. After all, without a loyal customer base, how can you hope to compete with the rest of your industry? While acquisition marketing is a necessary method for getting your business off the ground, the reality is that retaining customers is easier, more valuable, and generally a better strategy for success.
Don’t believe us? According to research by Invespcro, it costs five times as much to acquire a new customer as it does to retain an existing customer. Additionally, returning customers typically spend 67% more than new customers, while US companies lose approximately $136 billion per year due to avoidable customer switching. So as far as customer retention is concerned, it’s undeniably a good investment. But where do you start?
Luckily for you, there are plenty of helpful ways to focus your marketing efforts on customer retention, so that you can build a loyal customer base that will buy more, spend more, and sing your praises. Here are five helpful ways that you can keep your customers happy and coming back for more.
Provide Lots of Support
While it’s certainly not the most fun part of running a business, keeping customers happy begins with addressing complaints, and you can’t do that without a good customer support infrastructure. Unhappy customers are bound to surface – either raising concerns to you directly, or worse, complaining about you on social media – so having a team dedicated to solving problems and keeping customers happy is crucial.
But what does improving customer support look like in actuality? For one, investing money in your customer support team is a staunch necessity, which can be a hard truth to swallow for some business owners – particularly when there’s no direct return-on-investment that you can measure. However, stats have shown that a mere 5% increase in your customer retention efforts can yield as much as 95% return on investment in the long run.
As for the importance of providing good customer service, it’s hard to argue with the stats on this one too. With research by Superoffice showing that one in three customers insisting that they’d leave a company they love after one bad experience, and 92% saying the same after two or three bad experiences, addressing customer complaints in an efficient, cordial way could be the difference between a loyal customer base and a floundering business.
Take Action on Feedback
If you think fielding customer complaints is hard, just wait until you actually have to do something about it. Yes, listening to your detractors might feel like walking on hot coals, but the reality is that customer complaints often reflect very real pain points for customers – which means that listening to them and taking action could dramatically improve your customers’ experience overall.
When you think about it, feedback in the form of complaints, reviews, and surveys from customers is really just free research. Rather than spending your hard earned resources on experts and consultants, you can just tap actual customers for their invaluable insight; it’s a win-win!
The key, though, is to actually take action on that feedback. With 52% of customers believing that companies need to take action on feedback, this strategy will help you build towards a more successful business right off the bat.
Utilize Email Marketing
It’s 2020, and by nearly every metric you can muster, email marketing remains one of the most effective ways of reaching, engaging, and retaining customers. In fact, some studies have shown that every dollar you spend on email marketing has an average ROI of $42, which is more than enough to make it worth your while.
When it comes to retaining customers, though, email marketing can serve more goals than just outright financial gain. By investing in your email marketing – specifically a newsletter – you can foster an online community of loyal customers that are happy to support your business in more ways than simply making purchases.
Plus, customers spend 19% more at a company when they feel they belong to that company’s online community, so it certainly won’t hurt your bottom line in the long run.
Automate As Much As Possible
All these helpful strategies sound like a lot of work, don’t they? Setting up a newsletter, investing in your customer support team, and taking action on feedback takes time and money that your business might not have. Fortunately, if you play your cards right, you should be able to automate many of these operations, giving you the power to improve without draining your resources.
From CRM software to telephone systems, there are dozens of online resources designed to help you automate as much of your business as possible. No more tedious data input, no more customers left on hold, and no more lost opportunities for great reviews. These resources will save you time, make you money, and generally improve the function of your business, without costing you an arm and a leg.
And the proof is in the pudding – according to PwC 54% of executives say automation-based solutions that were implemented in their businesses have noticeably increased their productivity.
It may seem inconsequential, it may seem tedious, and it may seem unnecessary, but customers notice when you don’t show your appreciation. Whether it’s through special loyalty programs that provide discount codes to repeat customers or referral systems that reward your brand ambassadors, showing your customers that you care is the fastest way to make sure they come back for more. In fact, according to Bloomtools 68% of customers leave businesses because of perceived indifference, which means appreciation has a direct impact on the success of your business.
Overall, being appreciative is a good model for business in general. Viewing customers as numbers rather than people is a surefire way to erode the foundation of customer loyalty built through the previous four strategies. If you want to keep your customers happy, the most effective strategy you can employ is acting like they aren’t just a means to an end; they’re the lifeblood of your business and should be appreciated accordingly.