It’s no secret that customers form the lifeblood of any burgeoning business organization. A strong customer base usually means a thriving business. Companies devote thousands of hours to developing elaborate customer acquisition strategies, then spend millions to execute those strategies. Yet, research continues to reveal that organisations may be better served in directing more time and money to their customer retention strategies.
An ever-increasing number of studies show that companies spend far less on retaining customers than they do on acquiring new ones, while also yielding greater profits. A study from Harvard Business School revealed that increasing customer retention rates by just 5% could increase a company’s profits by as much as 95%.
Further studies show that 12-15% of customers who remain loyal to a specific retailer can generate up to 70% of that retailer’s sales! Given these numbers, it makes sense for corporations to focus heavily on retaining customers rather than simply trying to attract new ones to the fold.
If client retention is such a vital component of business growth, then firms would do well to develop strong customer retention strategies. Here we take a look a few strategies that have proven to be successful:
Ask for customer feedback
One can never overstate the importance of customer feedback. Companies that regularly elicit feedback from their customers (through the use of feedback surveys, for example) gain great insights into how customers feel about their organization, which products and services work and which ones do not, and which mechanisms and processes can be improved upon.
Every company welcomes positive feedback, but negative feedback often proves to be more important. Client complaints provide businesses with an opportunity to not only repair a relationship but also prevent further problems down the line.
Set customer expectations, and meet them
Meeting client expectations goes a long way in retaining a client base. Before a company can meet expectations, however, they need to know what those expectations are. Find out what your clients expect from your organization, then implement a service level agreement that seeks to meet (and possibly exceed) those expectations.
Another tip: make sure that your promises are realistic. While every company would love to deal with every query or complaint the minute it happens, the reality is that time, money and personnel constraints will make this impossible.
Organisations need to be honest with their clients about what they can deliver and how quickly they can deliver it.
Everyone loves surprises, right? Companies that provide their customers with surprises from time to time build a great deal of goodwill. Surprises remind customers that they are appreciated and that their patronage does not go unnoticed.
These surprises can take on many different forms, for example, special gifts, exclusive discounts and offers, engagement with customers on social media posts, or even just a note of thanks.
Whichever one you choose, rest assured that your customers will feel more inclined to reciprocate the gesture.
Build a strong loyalty program
Loyalty programs are an essential tool for any customer retention strategy. In a world where “out of sight” often means “out of mind”, loyalty programs offer a great way for companies to engage with existing clients.
As the market shifts away from card-based rewards to mobile apps and digital loyalty programs, companies now have an exciting opportunity to continuously connect with clients. Through mobile apps, companies can place deals and discounts at the client’s fingertips and also engage in a host of other ways.
Mobile apps also offer corporations the chance to collect valuable customer data, enabling them to better segment their customer base and ultimately enhance the customer experience.
Educate your customers
Building a solid customer education platform can reap great long-term rewards. Companies that educate demonstrate that they are interested in more than just the initial sale. This education can take many forms, depending on the type of business.
For example, financial services corporations could provide access to material that educates investors on the pros and cons of the stock market. Food retailers could give customers access to various recipes that they may wish to try.
Educating customers on how to get the most out of a product or service is a surefire way of retaining those clients.
Create a Corporate Social Initiative
Consumers love supporting corporations that they deem to be socially aware. Corporate Social Initiatives provide companies with the opportunity to invest back into the communities that they serve.
It demonstrates that a company cares about more than just the bottom line. Although the main aim is to give back, there is no denying the reciprocal value; companies that invest in a community are more likely to be supported by that community.
We could add several other options to this list, but one thing remains clear: a company that genuinely focuses on its existing customers will reap the rewards. Customer acquisition strategies should by no means be abandoned; those are still important. But companies who neglect their existing clients will find themselves expending more time, money and effort to keep their business going than companies who don’t.
If you’re looking for customer acquisition strategies that will work for you, we have exactly what you need in this handy article.