Customer acquisition strategies get huge attention – after all, new customers are the lifeblood of any business. However, you have probably heard the stats before – it costs six to seven times more for an organization to acquire a new customer than to keep an existing one. So while you should never lose focus on acquiring new customers, don’t forget about the ones you currently have. According to Bain & Company, just a slight increase of 5% in customer retention can result in a profit increase of 25% to 95%, and Gartner reports an increase of up to 125%. Now these are numbers worth paying attention to!
To Retain Your Existing Customers, You Need to Know Them
This goes without saying, but although many marketers understand this in theory, gaining that elusive 360-degree customer view can be somewhat elusive. Time and time again I hear from companies, “I have all this customer data, I just don’t know what to do with it!” The first step is to tackle this problem head-on by getting your data in order.
You may have any number of data sources sitting in spreadsheets, billing systems, customer service centers, email programs, and so on. One spreadsheet may contain names and billing addresses, another data system may contain purchase history, and yet another system contains details on age, income, or other demographics. Imagine the power of combining each of these sources (and customer details) into one database. Looking at each source separately gives you little glimpses of your customers. But when everything comes together into one holistic view, you can really begin to know your customers, their likes, lifestyles – and ultimately, what will keep them loyal and buying MORE.
While some companies may consider a project like this a cost, it truly is an investment which can begin providing immediate payoffs. With a better understanding of your customers, retention strategies are much more successful – and as our statistics show, a 5% increase in retention is well worth getting your data in order.
Email: The Most Effective Digital Tactics for Customer Retention
Today’s consumers regularly use multiple digital channels on a daily basis – mobile to check email and messages, social media to interact with friends and peers, the internet for research, and so on. Digital is part of our everyday lives so it only makes sense to use digital as a key component for customer retention strategies.
According to a study by Gigaom, email is the most influential tactic for retaining customers, followed by social media and content marketing. When based on data (remember step one, getting to know your customers), email has one of the highest ROIs for digital outreach strategies. You can reach your current customers with highly personalized messages and offers based on their individual likes, preferences and purchase history. It offers a direct avenue of communication and the likelihood to maximize return on investment.
Customer retention strategies should be put in place as soon as someone becomes your customer. Build engagement through personalization. For example, use analytics to determine which up-sell or cross-sell products will be most appealing based on past purchase or browsing history. Send informal email surveys to gauge how you are doing. Even something as simple as a Happy Birthday message can go a long way to making your customers feel special – and more loyal.
Remember, if you are missing important email addresses, using an email append service will ensure that stay connected with your customers and are not missing out on valuable opportunities.
Are You Providing Positive Customer Experiences?
The customer experience plays a huge role in keeping your customers loyal. In fact, customer experience is overtaking price and customers are willing to pay more for a positive experience. Take a look at these statistics from Oracle:
- 81% – customers are willing to pay more for a superior customer experience.
- 89% – customers switched brands after a poor customer experience.
- 20% – annual percentage revenue losses due to poor customer experiences.
Unfortunately, while these numbers clearly lay out the importance of positive experiences, many companies are falling short. One research study found that while 80% of CEOs believe they deliver a positive customer experience, only 8% of their customers agree.
Here are some sure-fire ways to retain more customers with positive customer experiences:
Offer Personalized Experiences
Today’s consumers are inundated with mass marketing messages that have no relevance and are quickly forgotten. According to MyBuy’s 2015 Personalization Consumer Survey, consumers are more loyal and purchase more from brands who:
- 53% – Suggest products based on browsing or buying behavior
- 49% – Personalize online ads that promote offers and products from website activity
- 48% – Send personalized emails based on past browsing and buying behavior
- 48% – Personalize the shopping experience across all channels
- 33% – Show personalized ads in social media feeds
Utilize Social Media Channels
Consumers are actively seeking to engage in conversations with their favorite brands through social media sites. Providing exceptional customer service is a key component to creating a positive customer experience. According to a study from NM Incite, nearly half (47%) of U.S. social media users today actively seek customer service through social media. Prompt attention to customer complaints, questions or comments on social sites provides a great opportunity to build better customer relationships with social followers.
Reward with Loyalty Marketing
The concept of loyalty programs is not new. Airlines have been using them for years. These programs are purchase-based, rewarding points, freebies, or other incentives for purchasing. According to FiveStars, a company’s most loyal customers spend 10 times more than new ones. Consumers who sign up for loyalty programs want to hear from companies. FiveStars cited that 65% of a company’s most loyal customers want to receive coupons and promotions on a regular basis. However, customers do not want to receive every offer on the table. By analyzing customer profiles and channel preferences, marketers can deliver highly targeted offers on a regular basis.
With rising customer acquisition costs, businesses must be innovative and proactive in retaining their valuable clients. 68% of your customers leave because they were unhappy with the service they received. Be sure to prevent this from happening by implementing data-driven customer retention strategies to keep your customers loyal, and your profits higher.
To learn how to enhance customer relationships with data and deliver value across the entire customer journey, download this free solutions guide.