Stop Chasing New Customers! Focus on These Customer Retention Strategies Instead

by | Apr 28, 2021 | Strategy

Overlooking existing customers in pursuit of acquiring new ones is a common mistake. While customer acquisition is critical for growth, meeting the needs of your existing customer base is perhaps more critical.

Customer acquisition versus customer retention

Acquiring new customers and retaining existing ones are both important for business growth. In fact, one can’t actually happen without the other. Customer acquisition refers to gaining new customers and leading them towards purchasing your service or product for the first time. Customer retention is what follows. It refers to the methods you use to keep the same customers coming back to you – weeks and even years later. Although the benefits are not as instant or obvious, the relationship-building that happens in this stage is critical for continued growth and success.

Why is customer retention so important?

In order to understand this, we have to understand happy versus unhappy customers. Happy customers refer you to friends, write positive reviews, and continue to purchase your products or services for years.

Unhappy customers, on the other hand, can create a world of problems that can harm your brand’s reputation and stress out your employees.

Unfortunately, customer retention strategies are often overlooked. But did you know that an effective retention strategy can generate impressive returns, such as a 25 – 95% increase in profits?

Do we have your attention now?

Now that you understand it’s importance, let’s dive into 6 strategies you can explore for your business to start building a loyal and happy customer base.

1. Practice the art of social listening

Is listening really that powerful?

When you feel that you are not listened to, what types of emotions typically ensue? Maybe disappointment, frustration or even anger. This can be extremely stressful and damaging to a brand. But listening isn’t just about picking up the phone and listening to a customer go on about their dissatisfaction with your company.

Social listening is the key to truly understanding your customers. This is the process of quietly monitoring various social media channels for mentions of your brand, competitors and product. This can be done by taking a look at relevant mentions, hashtags and industry trends. Expand your search so that you’re not just focussed on what’s being said about your own brand, but about your competitors too. This gives brands an opportunity to track, analyze, and respond to comments about them or answer general questions about that product or service. This is a crucial component of audience research and brand loyalty.

2. Offer tight security and secure check-out

When making a purchase, it is important for your customer to trust you with their personal and banking information. Try to keep required fields – such as name, address, etc. at a minimum and only necessary upon check-out. Up your privacy game by staying on top of trends concerning CRM and website tools, and always make sure you are complying with privacy regulations.

3. Exemplary customer service

Have you ever been so disappointed with a product that you felt the need to contact the company directly? How satisfied were you to get a quick response, maybe have your account credited, or receive a new product? Aim for a positive customer interaction every time. This could mean having more flexible regulations for returns or cancellations if a customer takes their time to reach out to you. Remember, you want them to feel heard. Soon enough, you’ll be reaping the benefits of word-of-mouth marketing, as up to 92% people would take a personal recommendation compared to an ad alone. It is truly all in the experience!

4. Integrate a live chat to your website!

A typical customer support reply via email can take around twelve hours. Prevent customers from losing interest, getting frustrated, or going elsewhere by using a live chat. These quick and short messages are more efficient than e-mail and can result in higher loyalty. Don’t stall on exploring any of the countless instant messaging tools out there.

5. Get personal (But don’t be creepy)

About 73% of customers report that sellers and brands are not fully meeting their expectations. Providing personalized touches can greatly improve a buying experience. Some methods include offering bonuses such as discount codes for giving a review or setting up abandoned cart notifications to remind customers of what they once wanted. Invitations to join a loyalty program, free trials or samples are other examples of what digital customer service looks like today.

6. Ask for feedback

It’s important to understand how frequently customers want to receive updates from you on regular basis. Even if you have many passive customers, the basis of a long-term retention strategy is to keep your customers, since they become more valuable with time. Asking for feedback is a great way to gain insights and help you understand what you are doing well, and what you can improve on.

Try sending personalized surveys asking how customers are enjoying their purchase weeks or months down the line. This shows that you care enough to check in and that you stand behind the quality of your product.

Don’t forget – It’s just as important to know about what you did well as what you did wrong. Ask those customers you failed to retain why they left, and what you can improve on for next time. There are countless survey softwares available online. The data you receive from surveys will be immensely helpful with tracking trends and statistics over time. The likelihood of selling to a repeat customer is 60-70%, compared with a 5-20% chance of selling to a new customer. It is well worth the ask.

Having a top-of-the-line product does not guarantee the retention of that customer. Products are available on countless platforms which constantly bombard prospective buyers with endless advertisements. Back in 2007, the New York Times reported on a study which estimated that the average person sees up to 5,000 ads per day. That figure is likely much higher in 2021, although no official estimates are available. It is safe to say that there are many companies just like yours trying to achieve growth by advertisements alone.

The landscape of customer retention strategies is constantly changing. One thing that holds true over time is good customer service. This can always be achieved by listening to your customers. Employing some of the digital strategies outlined here will help you begin to earn customers’ trust and loyalty. Learning new tactics to improve your customer service while learning directly from your customers is necessary to stand out and stay relevant.

 

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