No matter what type of business you run, a solid customer base is one key element to building a viable business that remains profitable over the long-term. Obviously, your efforts to attract new customers should be ongoing. However, retaining the customers you currently have is equally important. Here’s why:
Nurturing the customers you have is easier than recruiting new customers. You’ve already begun building a relationship with your current customers. You’ve jumped the hurdle of earning their trust and persuading them to buy, and you now have the momentum of past customer actions on your side. With your newest customers especially, that’s a huge accomplishment—one you won’t want to waste through neglect. But, you don’t want to let your older customers languish either. According to Marketing Metrics, your likelihood of making another sale to a customer who has already bought from you in the past is 60 to 70 percent (not bad odds at all). Compare that to a 5 to 20 percent likelihood of selling to a completely new prospect, and the value of your existing customers becomes evident.
Retaining your current customers is less expensive than prospecting. The White House Office of Consumer Affairs estimates that it costs a business six to seven times as much to acquire a new customer as it does to retain a current customer—a significant difference. Based on that estimate, each of your current customers is worth six to seven times as much to your business as each new customer you recruit. Attracting new customers involves advertising, marketing, and prospecting and can also involve offering discounts and incentives, all of which cost money. On the other hand, current customers may only need an occasional reminder that you’re still around, that you still have something valuable to offer, and that you’re ready to deliver.
Every customer you lose is another you’ll have to gain just to keep your numbers steady. To grow your customer base and build your potential for additional revenues, you’ll need to gain more customers than you lose. By keeping your current customers engaged and active while prospecting for new ones, you can build your customer base more quickly—along with your sales—as you add new customers to the old.
4 Smart Ways to Keep Your Customers Coming Back
Here are four key strategies you can use to hold onto the customers you’ve already convinced to join the fold:
1. Make outstanding customer service a priority.
Always go above and beyond what’s expected to the greatest extent that it’s feasible to do so—and train your employees to do the same. Superior customer service is built on showing the customer that you care—that their time, convenience, and satisfaction matter to you. When customers feel valued, their loyalty may surprise you. In today’s digitally connected world, the number of people that one happy—or unhappy—customer can tell about their experience through social media, online reviews, and other online or mobile channels is astonishing. Do your best to make sure their communications about your business are positive by making their experiences with your company as positive and memorable as you can make them.
2. Solve customer service issues promptly.
Be creative in figuring out the best way to resolve these issues for each unhappy customer—and be sure they are resolved. One reason this is so important is because once you’ve lost a customer’s trust through one negative experience that’s left unresolved, it will take multiple (one source says a dozen) positive experiences to restore their trust—and that’s provided they aren’t among the 52 percent who stop buying from a company altogether after a bad customer service experience. Unresolved customer service issues continue to impact the unhappy customer’s buying decisions two years or more after the initial encounter for 79 percent of dissatisfied higher-income customers (those with incomes over $150,000 a year), 54 percent of Gen Xers, 51 percent of B2B customers, and 45 percent of women.
3. Create a better overall customer experience.
Customer service is an important part of creating a great customer experience, but so are the technical and policymaking aspects of your business. Your website, your mobile strategy, your company policies, your responsiveness to customer feedback, and your insight into customer relations all play a role. Creating a better customer experience involves reducing frustration, making it as easy as possible for customers to complete transactions online or via mobile, building an emotional connection with your customers, delivering on your promises, and making it as pleasant as possible for them to do business with you by phone or in person.
One key to acing the human part of customer experience is taking note of the emotional state of the customer both during and after an encounter. If your customer leaves angry or agitated, you have a problem. Simply put, if you expect your customers to want to stick around, your interactions with them will have to leave them with a positive emotional response rather than a negative one. The more ways you can inspire positive emotions in your customers in relation to the company and the people who work there—and the more positive the emotions—the more loyal your customers will be. And they’ll show that loyalty by buying more and recommending you to their friends more often.
4. Reward customer loyalty.
Show your customers you appreciate their business by offering special perks for frequent and/or large purchases or rewarding customers who recruit their friends via word-of-mouth marketing. There are actually many creative ways to show appreciation to your customers and make them feel great about sticking with your company. Starting a loyalty program—and doing it right—will not only help you retain customers. It will also encourage even greater loyalty down the road.
Recruiting new customers is necessary for keeping your business vibrant and growing. But, recognizing the value of your current customers and using smart customer-retention strategies to keep them actively engaged with your brand will make that growth a lot easier to achieve. And it will be well worth the trouble it takes in the end. If you could use a little guidance in developing any part of your customer retention plan, BizAssure has all the resources you need.