Smart businesses make sure that they are getting the most from the customers they already have. Let's see why retention matters and why it's the cherry on top
Sep 8, 2020 · 6 min read
New customers are vital to every business. The laws of attrition demand it - nobody keeps the same customer base they had 12 months ago. People - and life - move on.
As a result, businesses need to have a strong customer acquisition strategy - a way to keep new customers coming through the door and discovering your business. Otherwise, how else is a company to grow?
But, a good customer acquisition strategy is not - and should not be - the be-all and end-all.
Smart businesses also make sure that they are getting the most from the customers they already have.
It costs businesses far less to maximize the value of their existing customers, than it does to find new ones. In fact, on average, finding new customers costs five times as much. Think about it - your existing customers already know you and love you - it doesn’t take much to get them to spend more with you, if you are savvy with how you value them and market to them.
A key component of what keeps customers coming back is loyalty - it may sound obvious, but customer loyalty is an industry all of its own. It’s not enough for customers to feel an affiliation with your brand - they can get that from 100 similar brands out there. Smart businesses are using loyalty tools and software to manage the customer experience and make loyalty into something tangible and measurable to a business. And it’s a strategy that works - almost 60% of customers said that collecting loyalty points or rewards is one of the most valued aspects of their shopping experience.
Today’s loyalty is a long way from a simple, one-size-fits-all voucher or coupon - modern loyalty systems offer customized benefits, based on customer purchase histories, customer feedback and are tailored to what the customer would find most valuable to them.
Possibly the greatest thing that marketing to existing customers can do, somewhat ironically, is to organically grow your new customer base too. Over 70% of consumers will recommend a brand to friends if they have a good loyalty program. Not only that, but satisfied customers will share their experience with 11 different people - just a few of those each time who try you as a result of a recommendation, can make a huge difference to your bottom line.
So, rather than spending money finding new customers, it makes sense to find ways to market better to the ones you already have.
Because loyalty is so personal and should be unique to each business, we don’t want to tell you what you should do when it comes to building loyalty with your customers. But what we will do, is make sure you understand what not to do:
A bad experience can put off a previously loyal customer for life. Each and every customer needs to be made to feel special and valued. This can be done by personalised communications, an easy and smooth purchase experience, a two-way conversation, and of course, exceptional customer service when they are with you, whether that is online, or face to face. 69% of customers in a recent survey stated that customer service is very important when it comes to which brands they remain loyal to. Not only that, but 93% said they would make a repeat purchase from a brand with great customer service.
It’s not enough to show customers a great experience. It’s important, but many businesses not only show customers that they care, but they give them a little bit extra too. Customer loyalty is a two-way street. A great loyalty scheme which has special offers, incentives and bonuses can be all that is needed to make a customer choose Company A over Company B.
Have you ever asked your customers how they prefer to be communicated with? If you’re reaching out to a younger audience, chances are that they will prefer text messages and social media outreach. If your audience is older, they may prefer emails and find text messages too intrusive. The best way to find out is to ask them - either at the time they sign up to your loyalty program, or by sending out a survey. Then you can update your loyalty software to make sure you are communicating with your customers the way they like it - not the way that suits you best. And if that isn’t enough to have you ask them the question - 77% of customers said they favour brands that ask for customer feedback.
There should always be something to tell your customers. Whether it’s a new product or service, or an industry trend that may interest them, it’s up to you as a business to keep your customers engaged with what is happening. If you’re really struggling, think about how to repackage what you already have - put a few products or services together and spread the word! Or, if you’re a local business, think about what is happening in your area that you can piggy-back a news story from. If you are really stuck, sign up to your competitors' news stories and social media and see what they are doing, to get some inspiration of what your customers may be interested in.
You may personally hate technology. But you are not the customer of your business. Managing your business with a paper and pen may be your way of choice, but it’s time to get with the program. People want and expect innovation. From social media, to chatbots, the way we communicate matters. Be a leader, not a follower. In fact, research shows that 95% of loyalty program members want to engage with a brand through new and emerging technologies.
There are plenty of businesses out there who make a good living from piling high, and selling cheap. But quite often, this strategy does not build loyalty if what you are selling is poor quality. People will sometimes compromise some drop in quality for a bargain price, but if you want to be consistently outperforming your competitors, quality isn't something you should ignore. And the same goes for loyalty programs too. If you are giving away something that nobody really wanted in the first place, don’t be surprised if you find yourself losing customers. Make any loyalty offer something worth having, that will delight your customers and will have them spreading the word, not heading off in search of better deals to be had.
Sometimes people, and life, are just moving on. It isn’t personal, but not many things stay the same over the course of our lifetimes. However, loyal customers really are loyal, and despite moving, or a change of circumstances, many will still want to be part of your loyalty program, if it’s done well and they are given a reason to stay. If you make sure to continually delight, excite and engage with your customers, the chances are that they will be going nowhere. Not convinced? 77% of US customers said they remained loyal to specific brands for 10 years or more, while the average American moves house once every five years. You do the math.
Time and time again, the numbers show that there is far greater value in maximising the value of customers that you do have, rather than new ones that you are trying to attract. If they are already with you, your customers are more amenable to spending more, buying different products and trying new things with you. A great loyalty program, that gives costumes what they want, the way that they want it, can help keep those customers who already love you coming back - and spreading the word to their friends and family too.
Co-Founder/Customer Happiness Manager at RetentionForce
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