Say you lost a few of your customers to your competitors - What would you do?
Obviously try winning them back, or work harder to acquire new ones, or make more sales with existing ones, or better still, do all of the three…. right?
I guess those are the most logical steps forward, after all, a business will only find success if it always keeps a full pipeline and converts it into an improved bottom line…
But how about not losing those customers in the first place?
Now that would definitely save the day, because the stats are really in favour here: It costs five times less to keep an existing customer than to attract a new one!
Also, we know all too well that businesses can only thrive if the ‘churn rate’ is smaller than the rate at which it acquires new customers. And given that, the probability of selling to an existing customer is much higher (60-70) % than selling to a new prospect (5-20) % - It is clearly a ‘no brainer’ that ‘Customer Retention’ should be a key priority for any business.
We'll now go right ahead and explore a few strategies that will help boost your Customer Retention Rates:
1. Creating Excellent ‘Customer Experience’
Customer experience plays a massive role in improving brand loyalty or in ‘repeat purchases’. It’s crucial that businesses pay close attention in fulfilling customer satisfaction levels, as some estimates claim; 68% of customers leave due to poor treatment and poor customer relationships.
To start off with, you can always take regular customer feedback via satisfaction surveys or other customer engagement approaches and implement them into impactful messages and actions to meet customer expectations.
For a typical customer today, an ideal ‘customer experience’ could mean satisfying numerous needs throughout the Buyer’s Journey. It could mean anything from ‘Receiving quick response to inquiries and complaints’, ‘Finding access to interact via multiple channels and platforms’ to ‘Having personalised and tailor-made experiences’:
Courtesy: dBsquaredinc
When you empower your customers by meeting their expectations and providing a seamless experience of your products and services – it’s highly likely they’ll connect with your brand for the long haul and build a loyal, sustainable relationship.
2. Clarity On Purpose & Mission/Vision
If anything that rings true in today’s highly-connected, ‘digitised-information-economy’ , is that – consumers or buyers are better informed than the sellers.
Gone are the days when you pumped massive money into ‘mouth-watering’ adverts and lulled the naive consumers into buying your lousy products. Today’s customers have their eyes and ears over you 24/7, they have expectations that go beyond consumption of ‘quality products and services’ - into testing your performance on the ‘ethical’ grounds.
Whether its big clothing brands running unethical labour practices; or airlines inflicting pain on their customers rather than solving their problems – nothing will go unnoticed and even a slight negligence can bring giant companies to the ground, costing them millions to rebuild their brand image and to win their customers’ confidence.
On the flip-side, brands that are genuine and ethical, and those who strive to stick to their noble vision/mission to deliver their promises are rewarded with loyal customers for life.
Take TOMS – With their mission and a clear ‘purpose’ which is to change lives of children, where for every pair of shoes that are purchased, the shoe company donates a pair to children in need.
Their message is simple and clear and their actions sincere and purposeful – which have helped them connect to millions of customers and fans worldwide, who are not only happy to be associated with the brand, but are equally willing to be their brand evangelists!
3. Launching Customer Loyalty Programs
A Customer Loyalty Program is a rewards program or a ‘lucrative hook’ offered by brands to customers who are frequent buyers.
Loyalty Programs generally entice customers to earn free ‘points’ on every purchase, which can later be collected to redeem any rewards like; free merchandise, coupons, frequent flyer mileage for air travel, exclusive club memberships, etc.
Showering customers with such reward schemes makes them feel good about getting that ‘special treatment’ and they’ll rather stick with you than cross-over to shop at a competitor who doesn’t give that ‘extra’ value for your money.
Cosmetic brand Sephora is one such brand who has found huge success with its points-based loyalty program. Every time a customer buys a product from them, they get one ‘Beauty Insider point’ per dollar spent, which can be redeemed for beauty supply items at the checkout counter.
4.Cranking Up The ‘Convenience’ Factor
Customers are always on the lookout for a smooth and ‘hassle free’ transaction. Those brands which are innovative and creative enough to give that convenience to its customers, always gets chosen over others.
One such brand who is doing exceptionally well to retain its customers with the ‘Convenience’ card is Amazon. With its advanced ‘Amazon Go’ shopping technology it's created a convenience store, without any checkout counters. With their ‘just walk out’ technology and an App on your phone, you can enter the store, grab what you need and simply walk out.
There are no long lines at the cash counter, no payment, but a seamless shopping experience. The goods you take will be automatically tracked on a virtual cart and you’ll be charged on your Amazon account when you leave the store.
(Click here to view the video)
5. Keep Listening…Always!
It’s impossible to satisfy your customers, or ascertain what your customer needs, unless you ‘listen’ to what they’re saying.
Listening can either be done deliberately, via conducting regular surveys and going through customers’ feedback, or indirectly through ‘social listening’ (which as of now, is a top priority with successful brands).
Needless to say, brands who are invested on listening to their customers’ plights and delights in the social media by sharing ideas and exchanging comments, initiating conversations and answering queries – are better off at ‘feeling’ the pulse of their audience than their competitors.
These user data and insights help brands to appropriately perceive their customers’ needs and aspirations and craft tailor-made messages and solutions to address their challenges.
Here’s an example of how Tesla and SpaceX’s CEO Elon Musk made a positive impact through ‘social listening’ by responding to a customer’s concern.
A Tesla owner had complained about fellow consumers hogging spots at a 'charging station' at San Mateo, by tweeting the complaint to Elon. Within minutes Elon replied with a promise to take action:
In a few days Tesla responded with a new policy on their website, indicating that an ‘idle fee’ charge of $0.40 will be slapped to the owners who occupy the spots for every additional minute, even after the car is fully charged.
That’s the power of social listening, brands like Tesla, who are alert and dedicated to providing immediate solution to customer’s challenges, will always win the confidence and loyalty of its customers and increase Customer Lifetime Value (CLV).
Finally…
When the stats say that 65 percent of a company’s business comes from existing customers, it makes sense to try every customer retention strategy you can find.
We hope the above takeaways will help keep your customers for years to come!
If you'd like further assistance or would like to discuss anything covered today, we'd love to hear from you.
Call Andy Fox (me) on (03) 5249 5570 or email andy@element7digital.com.au
Our Website is www.element7digital.com.au
