Existing customers hold the key to your future business growth. Gartner research shows that 80 per cent of a business’ future revenue comes from just 20 per cent of existing customers [1]. In the same vein, the probability of selling to an existing customer is around 60-70 per cent, compared to just 5-20 per cent for a new prospect [2].
Whilst new customers are of course crucial to the lifespan of any business, given that it costs five times more to acquire new customers than to keep current ones [3], businesses must take definitive steps to retain existing customers. Why? Those consumers that enjoy brand affinity, good customer service and a personalised shopping experience will come back time and time again as well as openly referring friends and family, resulting in business growth both in reputation and your bottom line.
Easier said than done? Here’s fives ways to solidify your customer retention strategy…
1. Champion Exceptional Customer Service
Businesses believe only 21 per cent of their customers leave because of poor customer service (Help Scout, 2012). In fact, our research shows the figure is much higher, at around 70 per cent. Good service fortifies trust whilst poor service drives customers to your competitors. So make sure to shout about the good times and respond appropriately to the bad.
Three steps:
1. Be consistent in your communications. Instil a dedication to customer satisfaction in every employee to go above and beyond the call of duty, which means delivering what you’ve promised and more
2. Provide an immediate response to complaints and queries
3. Don’t pass the buck! If something goes wrong, take responsibility and seek to rectify the situation immediately
2. Create a Buzzing Community Around your Brand
Customers active within a business’ online community spend up to 19 per cent more with them than those less engaged . This is because customers who are part of a positive brand culture feel reassured in their purchase choices as well as validated in their relationship with a popular brand. It’s therefore crucial that you invest time and resources into creating brand buzz.
Three steps:
1. Create social media presence through owned platforms for your business (if not already in existence). But don’t just create and ignore, post engaging content and encourage fans to be part of the conversation
2. Start a company blog and talk about the things your business is doing and planning. Allow comments and ask for your customers’ input
3. Provide fun, informational or thought-provoking content for your customers – the sort of thing you’d share with a friend! This creates trust and breaks down business or buyer barriers
3. Communicate Frequently
Close to 68 per cent of customers have left a business because they felt uncared for [6] so keep in touch with your customers, making sure they’re up-to-date with business developments, offers and milestones.
Three steps:
1. Remind your customers that you’re thinking of them with a rolling calendar of communications
2. Thank-you messages, special offers, order follow-ups and sale notifications make customers feel valued and important
3. Ask your customers what they think of your service. Online customer reviews are a great tool to help you learn what works and what doesn’t, directly from the horse’s mouth. Taking this feedback and building on it will increase repeat business and reduce customer churn
4. Make it Personal
Personalisation is more important than ever before, and each year more and more customers cite a personalised brand experience as a key purchasing driver. After all, our Trust Economy research demonstrates that 75 per cent of customers say they would return to a business that delivers personalised content.
Three steps:
1. This means communicating with your customers like a human – not a bot
2. Target your communications to individual users’ demographics and purchasing history
3. Remember it can be as simple as sending a personalised email once in a while. Personalised emails drive 18 times more revenue than blanket emails and boost conversion rates by 10 per cent (Aberdeen Group Email Marketing: Get Personal with Your Customers)
5. Reward Loyalty
Businesses often entice new customers with great deals and offers while existing customers are neglected – change this! Give existing customers a reason to use you again.
Three steps:
1. A point-based loyalty program that yields money off future purchases including surprise coupons and vouchers following a purchase
2. Extra treats and freebies for repeat customers
3.Exclusive news and access to sales and special events
So, the importance of keeping existing customers happy is undeniable, both for business growth and for helping to build a strong base of brand advocates. Reducing customer churn by just five per cent can yield a 25-125 per cent increase in profits . That’s definitely worth examining your customer retention strategy for!
By Jan Vels Jensen, CMO at Trustpilot
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