When starting a business, there are three things you should accomplish:
- Generate leads
- Convert them into customers
- Make lots of sales
Some entrepreneurs are very good at getting leads. They can introduce a new product and be able to entice a new group of audience with their pitches and demos. But if you want a business that can stand the test of time and continue to make big sales, you must know how to retain your existing pool of customers before bothering to acquire new ones.
Data shows that customer retention is more cost efficient and profitable
According to an article by Simple CRM, which cited a study done by SAS and Loyalty 360, 68% of sales come from the existing customers. Additionally, a study made by Brandongaille showed that while 12-15% of buyers become loyal customers, they represent about 55-70% of a sales.
This shows that customer retention results in the biggest return of investment, and at a small cost too. Because the Harvard Business Review says that acquiring new customers can be five up to 25 times more expensive.
Indeed, Marketing Wizdom found that a business can risk losing 20% of their customers if they do not start building and strengthening a relationship with them.
To curb this risk, we will explore various ways you can improve your customer retention to keep valuable customers and promote brand loyalty.
Create valuable offers
Some businesses start with identifying who their high values customers are. That is, they find out which of their customers tend to come back more or who share their content more. This is good practice, but there is a danger to exclude those who are not able to buy from your store as much for various reasons.
What you can do is start with a database first. If you are an online enterprise, it is easy to collect emails of those who have purchased before, whether they are repeat customers or one-time buyers. If you are a physical shop, make sure to ask your customers if they want to sign up for a newsletter.
Then, create valuable promos that can entice them to make a purchase or at least to refer a friend. For instance, you can send a customer who abandoned cart an exclusive 10% discount if they continue with their purchase. You can also offer $10 off for every friend they refer. Just so you can offer something extra special for repeat buyers, you can create a promo code that only they can use.
Be proud of your advocacy
Especially during these dire times, a brand that fights for a cause gets more support from the public. If you have a personal stand you want to support, proudly advocate it. A good example of this is TOMS, who made it their mission to give a pair of shoes to those in need for every pair they sell in their stores. This is called a One-for-One business model, a for-profit entrepreneurship strategy that mixes philanthropy with business.
Other companies have started supporting the environment by promoting reusable utensils, others donate to human rights groups, and so on.
Of course, you would have to be transparent with how you are helping the world with your cause. You cannot just say you support women’s rights when there are no efforts to show that you are. Just like TOMS, see how you can contribute to organisations and show your customers where their support for you is going.
Show positive social proof
Encourage your customers to share their thoughts on social media. Positive reviews often has the biggest chance of pushing potential consumers to consider, and indeed to push through with, buying from your shop.
Reduce points of friction
There are different kinds of customers you need to cater to in order to make purchasing from your shop enjoyable for them. The three common ones are:
- Average spenders
The biggest concern are the tightwads or the conservative spenders. These are people who, even if they find your product to be worth the money you are charging, will not fish out their wallets to spend or will feel buyer’s remorse after a purchase. What you can do is to offer bundles once in a while so that they can see that they have saved more on their purchase. You can push them further by reiterating a need that your product can help them with.
A fourth kind of customer you need to look out for are complainers. These customers, no matter how much they have bought from your store, will find a way to complain about it. Make sure that your complaint system is user-friendly and responsive. A good practice is not to let a complaint go unanswered for more than 2 days. The same thought applies to customer inquiry.
Get personal with them
The trend nowadays is to speak with customers as if you are two friends having coffee in the afternoon. It is more personal, and there is nothing that annoys people more than knowing they are talking to a robot and not a person. So when you interact with customers, make sure you are using the language, voice, and tone that they are using. This means that you will have to study their online behaviour to know how you can best converse with them online.
Consistent branding is key
Executing any strategy is moot if your own branding message is confused. It starts with making sure your brand name is wholly yours. With countless businesses already existing, it is easy to choose a name that is already associated with another company.
For online enterprises, you can easily do a WHOIS domain lookup to check whether a website with the same name as yours but with a different extension exists. You can then negotiate with its webmaster if you can purchase it off of them.
For physical shops, coordinate with the trade and industry offices to find out whether you should be changing your store name or if you can retain it.
Consistent branding tells your customers that you are sure about what you offer and how you will impact their lives for the better.