A number of business owners commit the mistake of focusing more on expanding their client base rather than on retaining their clients. In other words, for them, adding new clients alone is synonymous with marketing. They should realize that retaining their existing customers is as important as acquiring new clients.
A study by Bain & Company reveals that on an average, the expenses incurred for attracting new customers are seven times higher than what is spent on keeping them. Not only that, if you are able to retain only 5% of your existing customers on an annual basis, your profits will increase by 125%. In short, retention efforts do yield results even in the long term and you will be able to build your business more efficiently.
This means you must create smart retention strategies for retaining your existing customers and also for converting your new clients into loyal and long-term customers. In short, right strategies will help you earn more by spending less.
The following suggestions may help you put in place an effective customer retention program.
1. Have an efficient CRM system
By having an efficient CRM system, you can track the effectiveness of your communications with your customers. Though an automated CRM system that consists of customized messages pertaining to issues, product information, etc. may be preferable, things should be manually monitored also because you may have to address the specific issues many of your customers may have. In other words, an efficient CRM will help in customer retention.
2. Move up retention in your priority list
You should accord more priority to retention than to acquisition. This means you should increase your budget for communicating effectively and purposefully with your existing customers. Hesitating to hire competent copywriters for crafting high-quality emails, messages, ads, press releases and other forms of communications may prove to be an expensive mistake. Copywriting professionals alone will understand the needs of your customers and craft contents suitably. Your marketing team should also be educated suitably for focusing on the existing clients with an aim to retain them as loyal customers.
3. Have a system for measuring customer value
You should have a system for measuring the lifetime value of your customers. This means instead of focusing on individual sales, use your database for measuring the total sales you get from every customer. Details such as frequency of their purchases, the monetary value of the purchases they make, etc. will help in determining their lifetime value. But at the same time, do not commit the mistake of ignoring the value of small customers. Remember that the present-day world is highly connected. Dissatisfied customers can spread about it through word-of-mouth as well as word-of-mouse.
The purpose of knowing the lifetime value of customers is to determine how much you must invest in your retention efforts for those with high lifetime value.
4. Customer service is very important
Customer retention is possible only if you focus on customer service. You and every employee working for you should have powers to make on-the-spot decisions for ensuring customer satisfaction. Employees should not delay handling the problems of customers. Remember that by delaying action on the issues faced by customers, you will be sending them away to your competitors.
5. Communicate frequently with your customers
Keep in constant touch with your customers. Send them messages about upcoming sales, offers, etc. You can also send “thank you” notes along with coupons for ensuring you get repeat business from them. Again engaging the services of a competent copywriter is very important for communicating effectively. But do not commit the mistake of irritating them by sending unsolicited emails.
6. Make the best use of social media
If you think that social media is just for pushing your messages or sending your likes, you are wrong. You can engage your customers and communicate with them effectively through social media. By sharing, commenting and thanking people, you can use these platforms effectively. It is not necessary that you must be on all the platforms. Be choosy but make the best use of them.
7. Every issue is an opportunity
Every issue you may face may have a kernel of opportunity in it. So, delve deep into every issue and find out the ways to improve yourself, your business and your products and services.
If you keep your focus on customer retention, you will get several ideas. You can implement the most suitable ones and derive the best benefits of your online marketing efforts.