Like most businesses, you work hard to acquire new customers in order to grow and obtain sales. But, like most businesses you are also forgetting that the easiest customers too please are the ones you already have. Money doesn’t grow on trees, so you wouldn’t want to just throw it around aimlessly, with your eyes closed and fingers crossed, right? Sadly, the truth is if you’re not investing in customer retention you might as well start. A one-time customer means a lost opportunity and a waste of resources. You’ve already spent funds advertising, creating content, paying employee salaries, and a host of other costs. With only a small amount of effort needed to shift someone who is initially a one-time visitor to a loyal customer, making an effort to keep customers sounds like a no brainer to me.
So, let’s get down to the nitty gritty and take a peek at the figures so we can show exactly why customer retention is worth it. The money spent driving new traffic to your business can cost five times more than to maintain the relationship with your current clients. These are absolutely crazy numbers when you acknowledge that increasing customer retention rates by 5% increases profits by 25% to 95%. With these stats, it makes sense to redirect your energy and dollars to keeping your hard-earned customers. Here are 5 reasons why you should be keeping a close eye on your current customers.
5 reasons to keep your customers happy!
1. Less marketing = Lower costs
As I've said once and will happily say again, retaining new customers is cheaper than acquiring new ones. So save your money and reduce marketing expenses you once used convincing new customers your products rock. Instead, focus on re-establishing those long-term customers who haven't heard from your business in a little while through email marketing and loyalty systems.
2. Room for improvement.
Happy long-term customers are considered golden geese when it comes to getting feedback and improving your offering and customer satisfaction rates. These individuals will be 100% more willing to explore any new products and test out any initiatives as they likely trust your business more than a one-time buyer. Not to mention, these individuals are likely to provide more accurate feedback than anyone else!
3. Higher profits.
Selling to existing customers is less about price, compared to selling to a new customer. And since they already trust you to some degree, its substantially easier to convince them to take interest in other products or services through up-selling and cross-selling. In fact, about 80% of your company’s future revenue will come from just 20% of your existing customers. Definitely something to think about when you hurry to serve the next 'Bargaining Barry' that waltzes through your doors.
4. Word-Of-Mouth Advertising.
No need to pay thousands of dollars to advertise your product online when you've got your loyal fanbase recommending your product to their friends, family, and on social media. Not only is this a free form of advertising, but authentic referrals are priceless when 92% of consumers believe suggestions from friends and family over advertising. Seriously effective people!
5. Reliable Revenue.
A one time customer is a lost revenue opportunity. Instead of becoming a loyal customer who spends money here and there and continues to support the business long-term, the one-time customer is there one moment and gone the next. In their wake, they leave a spot that your marketing and sales teams must spend time and money to fill. And even with these efforts, it's hard to know whether they will be replaced fast enough to allow your company to grow.
Ways to raise customer retention rates.
As you probably can tell by now, customer retention is super important and should be prioritised like any other group within you target audience. If you're coming to realise your company should start improving keeping their customers, we've got some insight to how you can increase customer retention rates.
Ultimately it all starts with tracking your customer's relationship with your product or service. Is their usage of your product becoming less frequent? Are there features they have not tried? These are small signs which tell you your customer may need some assistance which requires you to reach out and intervene before they churn. If a customer reaches out to you, respond quickly. If a customer calls, ensure your customer service team deals with each person in a friendly and helpful manner. Small choices like these are enough to appease any customer and secure their loyalty.
Reminding customers of your company can be done easily through personalised automated emails, and seamlessly maintain the relationship between your brand and its customers in a human way. All in all, the goal is to treat them like family. The same way you'd go over to grandma's house to guide her through for the 100th time how her TV remote works, go above expectations and make your customers feel special while dealing with your company.