As a business, the question is: What’s better than securing one new customer? Well, contrary to popular belief, the answer isn’t getting two new customers, it’s actually more like retaining an existing one.
Keeping customers is not a walk in the park. Think of it, you first had to spend money on campaigns to create awareness, then you had to woo them over and persuade them to believe in you; then you had to guide them through the selection process with all the competition at your heels like baying wolves…
The key to customer retention is exploring how to prevent your top customers from leaving, while growing as many as possible into loyal customers. While customer retention has a beginning, namely it starts with the first customer interaction, it should have no end. Retention should be an ongoing exercise, continuing throughout the customer’s entire relationship with your brand.
Interestingly, there are companies that appear to underestimate the impact retention has on revenue.
According to Gartner, “a 5% increase in retention can increase profits by 25% – 125%, yet most ecommerce businesses retain fewer than 20% of their customers.”
Retention can, however, be an imprecise concept, dependent on industry. It would be far easier if a customer told you simply that they are no longer a customer. That would make measuring easier to define!
A subscription-based industry has access to this information easily as subscribers drop off and subscriptions fall. However, for most businesses, it’s more passive and the customer does not inform you as they slip quietly over to the competition.
Your best customers are repeat customers, those that don’t buy one product or only use your service once. So, how to develop that loyalty, where you aren’t simply another store or website and where customers trust you with their money (without you being a bank)?
Well, being ‘real’ goes a long way to creating trust. No one likes to feel as though they are merely numbers, the soundboard for your selling. Make them feel unique and special by giving them a personalised experience. It can be as simple as remembering an anniversary, or maybe they have a son about to graduate. It’s the little things that make a big impact. Shared interests are a good place to start, whether sports, hobbies, or kids.
As a ‘supplier’ be ready with solutions before they present as problems, pre-empt issues. The more personal the approach, the better for your customer relationship. When people are treated as though they are special and you appear to care beyond the sale, they’ll come back for more. But you must be real!
A mistake brands often make is only talking about themselves. Yes, obviously you want to talk about your latest range, discount or service, but if you want to connect with your customers, you need to mix helpful information in with conversation. Call it commercial small talk. That’s how an online blog helps. This is where you can mix info and commerce. Customers want value-add, they want more. Be a helpful, approachable friend, not only intent with sell, sell, sell.
That way, customers will begin to know you, like you, and trust you — and, ultimately, that makes them want to buy whatever it is you are selling.
While you’re at it, surprise them, offer them something unexpected. Maybe a free cup of coffee with that purchase, or a gift card for over a certain amount. Make them feel recognised and appreciated.
Another really successful method to retain customers is through a loyalty program, because who doesn’t love getting something ‘free’, even if you ultimately have paid for it? This is where something of extremely low-value can seem like a huge win to the recipient. But it’s a win both ways, as they will continue to buy from you.
Stepping it up, you can create a VIP program where a perception of ‘exclusivity’ is the key. Sometimes it’s just the designation that makes people feel important and appreciated. Even minimal fringe benefits can create loyalty in a customer.
In addition, customer management is vital to customer retention. When something goes wrong — and it will — find a solution in the most professional way, no matter the circumstance, as one poorly handled issue can result in major damage to a brand’s reputation.
In summary, you need them to need you, so what are you doing about becoming indispensable in their lives — without appearing needy?