Did you know that it’s about 50% easier to sell products to an existing customer than to a new customer? Just a 5% increase in customer retention can increase profits by about 75%.
You need to invest more money to acquire a new customer than to retain an old one. And yet, many business owners focus their money and energies on acquiring new customers. In fact, investment in customer retention has dropped over the years.
If you want to maintain a good flow of profits, you should invest in customer retention. You can encourage loyalty and develop long-term relationships if you invest a little effort.
This article discusses different tips and tricks to help improve customer retention.
- Create a Great Customer Experience
Customers will keep coming back to you if they’re satisfied with the service you provide. Customer experiences have become very important these days because customers have become selective. They no longer tolerate brands that don’t walk the extra mile to please them.
Customer experience has become so important that around 89% of companies now compete based on it.
You need to make sure the customer experience from initial contact to final purchase remains smooth. If people have a great time with your brand, they’re less likely to look for alternatives.
- Maintain Engagement Through Emails
Emails are a great way to communicate with your existing customers directly without being too intrusive. It is important for brands to engage existing customers directly through newsletters, email offers, and other such forms of communication.
This helps keep your brand presence at the forefront. Existing customers won’t forget about you and might take up one of the offers provided in these emails.
Email marketing has a 3,800% return on investment so every dollar invested offers a $38 return. This means there’s no reason why you shouldn’t invest in it.
- Make Customer Service a Priority
No brand is perfect and mistakes can happen. Customers will become upset if they get a faulty product or have a bad experience with your brand. However, if you resolve the issue quickly and efficiently, they’ll be satisfied with your brand.
Most modern customers are willing to forgive mistakes if the business responds to their concerns quickly. But if you don’t respond well or take the customer’s complaint seriously, they will leave your business. They might also post a negative review against your business online.
- Create a VIP Program
Most modern businesses have a VIP or a loyalty program. Customers can earn points for every purchase and redeem it at a later date. Some brands also offer their loyalty program members early access to holiday sales and discounts.
This can help you retain your customers and build loyalty over time. VIP programs are also a great way to develop a more personal relationship with a customer through regular communication and special offers.
It’s not too difficult to set up a loyalty program and you won’t need to invest much to provide customers with attractive discounts regularly.
- Add Some Personal Touches
Modern customers are picky and they’re also fickle. Brand loyalty won’t stop them from shopping elsewhere if they find an attractive deal. However, loyalty can make them hesitate and that’s why it is important to cultivate it.
The best way to encourage loyalty is through personal touches. Offer special discounts or even free goodies on birthdays or anniversaries. Address customers by name in email communication. Encourage sales representatives to remember the names of the most frequent customers.
If you personalize your service, it will be easier to keep hold of existing customers.
- Honesty is the Best Policy
Many brands aren’t completely honest with their customers. They include hidden costs in their quotes, aren’t straightforward with their pricing, promise more than what they can deliver, etc.
Customers are only willing to trust a brand if they earn it. If you’re not honest in your interactions with the customer, they will turn away and look at competitors. Lack of honesty can also damage your reputation in the industry. It is very difficult to recover from a poor reputation.
- Know Your Limits
Big projects and large orders can be tempting because there’s a lot of potential profit involved. But you need to make sure you have the resources and manpower to deliver what you promise.
Many companies, especially small businesses, promise more than what they can deliver. They commit to a specific timeline or a specific number of deliveries without considering if they’re capable of handling it.
Your credibility will take a hit if you don’t deliver what you promise, which is why it is a good idea exercise some restraint. Make sure you and your customer are always on the same page when it comes to deliverables.
- Create a Community
Many brands have started to create close communities through regular engagement. This is largely thanks to social media and the prevalence of “fandom” culture.
Apple is a great example of this. The tech giant has a large, world-wide community of Apple “fans,” which increases brand loyalty and customer retention. In fact, some publications even claim Apple is similar to religion.
While you don’t need to go to that extreme, it is beneficial to encourage a community feeling. You can do that by engaging people on social media, running contests and competitions, organizing events, etc.
Offer Special Discounts to Long-Term Customers
As mentioned before, customers are always on the hunt for a good deal and loyalty will always take a backseat to that. But if the brand they’re loyal to offers a great discount, they’re very likely to pick it up.
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In fact, most customers will pick up a deal by their favorite brand even if they didn’t have the intention to buy the product. That’s why offering special discounts to customers is a great way to retain their interests.
By developing a great relationship with your existing customer base, you improve your financial stability. These customers are more likely to stick with you during slow business days or months.
Author Bio: Justin Kemp works with Ethane Technologies.