Let’s face it – getting new customers is hard. A lot of businesses spend most of their time and money on customer acquisition. But a common mistake is not prioritizing customer retention.
Did you know that according to econsultancy research, 82% of businesses say customer retention is cheaper than customer acquisition? But these companies spend more on acquisition instead of nurturing current customers. You worked so hard to get those customers, if you don’t make them feel valued, they will leave.
Customer retention strategies are the activities you undertake to keep long-term customers as loyal buyers of your product/service. The goal is to maximize the lifetime value of a customer by having them be a repeat buyer. Forbes has done the math. Increasing customer retention by just 5% can increase total profits from 25 – 95%.
And we all want to make more money, right?
So, here’s 5 ways you can amp up your customer retention strategy:
1. Use a customer loyalty program
Everyone loves free things. So why not reward your most loyal repeat customers with a loyalty program. Loyalty programs are a great incentive to keep your customers coming back more frequently and typically purchasing more in order to get to the next loyalty reward. Examples of loyalty programs are:
- Buy 4 and get the 5th 25% off, typically for more expensive products/services like manicures and pedicures.
- Buy 9 and get the 10th free, usually for lower priced common items like coffees.
- Earn points per $ spent then redeem points for free gifts, implemented at many beauty retailers.
2. Get customer feedback from surveys
Want to know what your customers think? Just ask them! You’d be surprised by the amount of feedback you get simply by sending a follow-up optional feedback survey to your email list of recent purchasers.
Customers will provide suggestions on how to improve your product/service and if they’ve taken the time to complete the survey or email you back, they have a lot of loyalty potential. Thank these customers for taking the time to provide valuable feedback by targeting them with special offers and promotions.
3. Increase communication, or lack thereof, with you customers
Communication is key. I’ve said it before, and I’ll say it again. Customers need to be nurtured and a good way to keep tabs on your customers is to monitor their purchase history.
What should you do if you see a customer that hasn’t purchased in a few months? A friendly check-in email will keep your business top of mind. If they still don’t purchase, try offering discount codes or sending sale notification emails to stimulate purchase.
4. Use a subscription model
Having your product/service based on a subscription model rather than a single purchase model is a great way to overcome the purchase hurdle, simply by eliminating it. With a subscription model you only sign-up/purchase once at the start, then the subscription will continue until the customer cancels or the subscription comes to an end. Common practice is to have them auto-renew. It’s more convenient for the customers, and definitely more convenient for your business.
5. Abandoned cart doesn’t not equal abandon customer
Follow-up with your customer with a personalized message to prompt them about their abandoned cart. Business Insider studies show that 60% of abandoned merchandise can be recovered. Don’t be pushy with your messaging, but a gentle reminder email won’t hurt.
By now, hopefully you’ve been convinced that customer retention is a must-have for your business.
Anyone that’s been in sales before knows that a warm lead is easier to sell to than a cold lead. Marketing Metrics quantifies the success rate of selling to an existing customer is 60-70%, compared to the success rate of selling to a new customer is only 5-20%!
At Chatnels we’re just about to launch our AI-powered chat platform as a freemium subscription model. Try it free by signing your organization.