Customer Retention: Critical Steps for Creating Loyal Buyers

     

Published: September 28, 2020

Acquiring a new customer can cost you at least five times as much as the efforts to retain an existing customer. On the other hand, casting a wide net to appeal to a broad audience of potential customers can seem simpler than the steps needed to keep your current buyers happy. But, is it really simpler to go through that effort just for a one-time visit? Let’s take a look at the need for customer loyalty for the long-term success of your business. 

Critical Steps For Creating Loyal Customers

Why Customer Retention is Essential

Marketing to new customers will always be an important part of growing your business, but working to hold on to your current customer base is essential to your bottom line. Not only is it less expensive to maintain relationships than it is to build new ones, but loyal customers also tend to spend more and boost your profits. In fact, one study found that increasing retention rates by just five percent led to an increase in earnings by at least 25 percent!

Much of this difference comes down to trust: building trust from scratch will always be more difficult than maintaining already established customer loyalty. Plus, every time you interact with a customer, you’ll have an opportunity to increase their levels of trust and confidence to inspire even more interaction—a process that’s entirely lost on one-time visitors.

5 Tactics to Build Loyal Customers

The numbers definitely support the focus businesses should have on customer loyalty, but not everyone is clear on how to make that happen. Here are five strategies you can put to work right now to help boost your customer retention rates.

Increase Customer Retention
  1. Don’t Just Sell; Educate. Rather than focusing only on upselling and cross-selling, help your customers understand why certain products or solutions would be beneficial. This will help people make the most of the purchases they’ve made as well as lead to future purchases down the road when the timing is right. Each interaction may not result in an immediate sale, but customer loyalty always leads to better sales in the long run.

  2. Book Future Visits. If your company offers routine or regular services (i.e., equipment maintenance) or consumable products that are replaced regularly (i.e., beauty products, printer ink), consider scheduling the next appointment or delivery at the time of service. Most people will be glad to have a simple task taken off their to-do list, and you won’t risk losing a customer who would have been happy to have you provide the service, but they went with another company that seemed more convenient in the moment.

  3. Customer Loyalty Programs. These programs are meant to be a reward for those customers who are happily patronizing your business, whether they are prompted to or not, and will help prevent them from being poached by a competitor with a hot sale or other enticing promotion. The more the customer frequents your store or makes a purchase, the more rewards they will receive. This boosts customer loyalty by adding an incentive and making people feel valued.

  4. Send Reminders. Reminding your customers that it’s time for a routine service or that they have a loyalty reward waiting to be used is a great way to demonstrate personalized service while encouraging repeat business. These can be as simple as an email or postcard dropped in the mail, or a sophisticated part of an automated email drip program or integrated into a customer-facing app.

  5. Feedback Processes. Improving your operations to make your customers happier starts by learning how your customers are feeling about your products and services. A formal system for collecting and analyzing feedback and then sharing that with your teams is critical. A simple survey distributed via email or social media is a simple way to start, and you can build on to your processes as needed.

Building Customer Loyalty at Every Touchpoint

Remember that every interaction is an opportunity to build customer loyalty. These interactions can be part of a formal retention program that includes the five points listed above. They can also incorporate other points such as a lively social media feed, exceptional customer service, and fun extras like birthday emails and exclusive offers. It may seem like a more complicated effort than reaching out to the crowd to fish for new buyers, but building a community of happy, returning customers will be more successful—and less expensive—for stabilizing your bottom line.

Sources:

http://www2.bain.com/Images/BB_Prescription_cutting_costs.pdf

https://www.forbes.com/sites/jiawertz/2018/09/12/dont-spend-5-times-more-attracting-new-customers-nurture-the-existing-ones/#5922b78a5a8e


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Tags: Customer Loyalty
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