For business owners, increasing revenue is a top priority. And in order to achieve this, they need to find ways to increase sales which, in turn, means they need more customers. For that reason, salespeople often focus on acquiring new customers instead of trying to retain the ones they already have.
This is a big mistake as retaining existing customers is much cheaper than acquiring new ones. In fact, according to stats, the success rate of selling to an existing customer is about 60%, whereas the success rate of selling to a new customer is only 5% to 20%. If this is not enough, here are some more figures:
- Approximately 65% of a company’s business comes from existing customers.
- If you increase customer retention by 5%, you can increase company revenue by up to 95%.
- It’s 5 times more expensive to acquire new customers than to retain existing ones.
Obviously, customer retention is very important, so if you’re not prioritizing it, it is time to begin. Here are 4 customer retention strategies that will keep your customers coming back.
Know Your Customers
Ask yourself: Do you know your customers? Probably not enough. Most often, marketers rely on data that doesn’t paint a detailed picture. For instance, according to your data, your customers are most likely to make purchases and open your emails in the evening, but it doesn’t tell you why.
This is why you need to start using split tests. Segment your target audience and then experiment with stuff like design elements, touchpoints, and copy to figure out which audience segments tend to engage with what. You can use the insights from these A/B tests to tailor your customer journeys and make sure you present the right message to the right person, every time.
Make an App
With the digitalization of different business aspects, apps have become a standard for companies of all sizes and industries as a perfect means to reach out to their customers on a highly personal level.
Customer satisfaction is the main factor that contributes to customer retention. Satisfied customers not only continue to buy from you but they also act as your brand ambassadors.
But how to make an app that will help you retain customers? Although creating a great app that excites customers ultimately turns them into loyal customers might seem like a pretty straightforward task, the fact that the mobile app market is quite crowded makes things quite challenging.
Technology has allowed customers to make more informed choices but it has also enabled businesses to monitor and reward loyal clients. Many people prefer to make purchases via their smartphones, which provides an amazing opportunity for brands to provide their customers with a great mobile app that will enhance their shopping experience. An app can also enable your brand to stay in touch with the customers once they’ve bought from you, which is a great base for building a positive image amongst customers and boosting brand loyalty. So, basically, a well-designed app is capable of satisfying and retaining your customers.
Provide Outstanding Customer Service
Did you know that U.S. companies lose about $62 billion a year due to poor customer service? Americans will tell 15 people about a negative service experience, and only 11 people about a positive experience. What’s more, after one negative experience, more than 50% of customers will never do business with that company again.
So, what makes ‘outstanding’ customer service? About 80% of customers cite friendly service, knowledgeable help, speed, and convenience as the key elements of positive customer experience. And yet, many brands fail to achieve this standard.
A great way to improve customer service and experience is by making your support team easily accessible. Provide a live chat solution on your social media or website. This way when customers have an issue, there will always be somebody to help and this will definitely improve your customer relationships. You could also provide a phone number that customers can use to reach out to you if they have any questions. However, make sure to make both the phone number and the live chat easily visible. If you want to improve customer retention rates, don’t make it difficult for your customers when they want to talk to you.
Reward Customer Loyalty
More than 30% of customers cite loyalty programs as the best way brands can encourage them to return and 75% of consumers say they favor companies that offer rewards.
Luckily for you, there are many ways to reward customer loyalty without hurting your profits: member-only competitions, exclusive event invites, early access to sales. Try several options to figure out what works best for you.
You can also use your loyalty program to better understand your most valuable customers and learn what motivates them to come back. This will help you to target your campaigns more accurately and refine your messaging.
Although acquiring new customers is a signal of business growth, you simply can’t afford to lose your existing ones because it’s too expensive. In fact, the average value of a lost customer is about $243.
Your existing customers are more likely to buy from you than prospects, making them an excellent opportunity to increase your profits. That’s why coming up with effective retention tactics should be near the top of your list. Simply put, the more customers you manage to retain, the higher your profits will be.
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Review 4 Customer Retention Strategies to Grow Your Business.