It is a well-known fact that is 8 times cheaper to retain a customer than to acquire a new one. Many businesses spend more of their marketing budget on trying to entice new customers rather than on keeping their existing customers loyal. Not only is it cheaper to sell to existing customers, but the success rate or conversion rate is also much higher.
Breaking this down to the simplest idea - your daily coffee purchase. If you find a cafe that you like, it is convenient, makes a good coffee, the barista knows and remembers your name and coffee order - you are more likely to continue to visit this cafe every day to make your purchase. From the cafe owners perspective, they simply need to continue to offer the same friendly service and quality coffee and they will keep you as a customer. No additional budget spent to retain you as a customer. To find new customers, they need to advertise. Spending time and money on social media, PR and other forms of marketing initiatives to entice new people to get in the door. The same can be applied for all purchases.
The golden rule is - existing customers are gold. Existing customers have already purchased from you, they know what to expect and they understand what your business is about. They can offer you advice on how to improve. You have an established and clear line of communication with them so it is easier to build a relationship, earn their trust and offer products, add-ons, up-sells or upgrades.
Here are 8 tips to increase your customer loyalty and retention rate:
1. Stay true to your company values
Your existing customers chose you for a reason, most likely because they like what you stand for as a business. They share the same values and feel that what you have offered resonated with them. Deviating from your brand values or vision could result in losing these loyal customers.
2. Record your customer interactions
Keeping track of your customer interactions is extremely important. It will help you understand the customer experience and allow you to give them better customer service. Just like the barista remembering the coffee order, a CRM is the best approach to manage your customer data - each and every interaction can be recorded, so no matter who in your organisation is dealing with the customer, they can review the case and know the customer history. This will mean they can instantly look up this information and personalise the conversation with the customer based on the historical record.
3. Reward your loyal customers
Roll out the red carpet and treat them like VIPs wherever possible. This may seem difficult when you have hundreds or even thousands of customers however a good CRM will be able to help you identify the highest spending customers, the most frequently purchasing customers and the ones you have been with you the longest. Once you have identified these customers, you can decide on how best to reward them. Sometimes, a simple and unexpected personal thank you letter is all that is needed. Some businesses set up loyalty programs, which can also be used to entice new customers as well as retain existing customers.
4. Keep your promises
When dealing with follow-ups or post-purchase service, make sure you keep your promises. This after purchase service is key in making customers feel reassured they made the right decision when purchasing from you.
5. Personalise your communication approach
Each and every customer wants to feel important and understood. Think carefully about how you treat your existing customers when you are marketing to them. Be careful not to offer them something they already have, try to add value by offering advice, tips and services that will improve their experience. Marketing automation can allow you to customise the communication that is sent to your clients. Put simply, marketing automation allows you to specify who receives what and when. You can set up specific triggers so that if a customer interacts in a particular way, it will automatically provide an appropriate and customised response.
6. Offer after-sales service
Don’t just take your customers money and run. After-sales service is incredibly important to retaining customers. This could be simply reaching out to ask how they have found the experience or offering them some time to talk or ask questions about the product.
7. Create a community
People love feeling like part of something. Chances are that all of your customers have similar tastes, pain points or interests. Inviting them to be part of your social community is a great way to get people talking, sharing and hopefully recommending your products and services. This should not be a sales gimmick, or a trap to try to sell more, it needs to be authentic and genuine. These forums could be used to educate, listen or support your customers.
8. Take constructive criticism
It is always good to know when your product no longer suits a customer. A civil break up with a customer will have fewer repercussions than a messy one. Owning up to mistakes, and rectifying the problems is better than ignoring them.
By instilling these tips into your day-to-day service, you will find that your customers will quickly grow to love the additional attention that they are receiving and have no need to move on and find another supplier creating you a customer for life.
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