Editor's Note: Samantha Prowell is a marketing strategist and educator, who joins us today to explain the importance of customer retention for your business, and how to implement customer retention strategies into a business plan.
Customer retention is an element that no online or traditional business can afford to ignore. Unfortunately, many business owners focus exclusively on customer acquisition, ignoring existing clients and reducing the chance of repeat sales. Good customer retention strategies build trust and loyalty, and customers who trust your business will improve your profitability by spreading the word about your brand. This builds in the long-term to a lasting fallback strategy should traditional acquisition methods ever fail. To help you retain customers and gain new ones through word of mouth, we’ve compiled five customer retention strategies that work every time they are tried. Let’s get started!
Know Your Customers
Forbes says that business associates who know their customers well succeed more often than those who treat them like any other client. According to behavioral psychologists, people tend to remember a particular service positively when they are not rushed or ignored. These studies demonstrate that you should get to know your customers better to enhance their loyalty. In a brick-and-mortar setting, ask your customers questions when possible to clarify needs. Let them tell you about what they want to build and accomplish. Tell your customer service representatives to spend a little bit more time with clients in order to understand them better.
It’s equally important not to make assumptions regarding customer preferences and beliefs. The behavior of consumers changes over time, so avoid judging your clients based on previous experiences.
For online businesses, getting to know customers better is more tricky, since it is impractical (but not impossible!) to communicate with all of them one-on-one. That being said, social media platforms like Facebook and Twitter are excellent ways to interact with your customers and get to know their preferences and personalities better.
Depending on your business, social media is not the only method of customer-interaction. For instance, Regions online mobile banking service invites experts to engage and retain their customers by using emails to touch base with clients on a monthly basis. This strategy has helped them to get quality engagements and build long-term relationships. While not everyone can use this method, it shows that being creative can build opportunities that your customers will appreciate.
Set Customer Expectations
Interacting with customers is a great way to build positive experiences, but it’s also important to avoid creating negative ones. Even if repeat clients have done business with you hundreds of times, one or two bad transactions will stand out in their memory like a sore thumb. It is therefore vital to set expectations for your customers early on so they are fully aware of your processes, and won’t undergo any nasty surprises. Everyone on your team should be aware of what your clients expect, and what you have promised to deliver. Prioritize the fulfillment of these expectations to minimize the chance of accidents or mistakes.
Your business should set expectations at every point in the sales funnel, from marketing, to product descriptions, to shipping terms, etc. A classic and highly effective strategy is to underpromise and overdeliver on the expectations you lay out. This streamlines your business plan by ensuring that customer retention is built into the very fabric of the way you do business, and helps to establish key performance indicators which can be used to judge the success of a particular period or campaign.
Be an Expert in Your Industry
Entrepreneur Magazine claims that nine out of ten customers will switch to competitors if they don’t get the right solution to their problems. Customers want to create long-term engagements with businesses they believe can provide long-term solutions that will last.
While it’s always nice to have a corner in your market, nobody starts there: you will always be competing with other businesses that do the same thing you do. As such, it’s important that you stand out among your competitors to prevent customers from going somewhere else for their needs. One effective way to do this is becoming an expert in your field, thereby giving customers value they cannot get anywhere else.
Become your customers’ most reliable adviser to build loyalty and trust. If you are selling electronic accessories, become the street smart equivalent of an MBA who knows the ins and outs of every electrical gadget in the market. Demonstrate this expertise by publishing content and advice that is relevant to your customers’ interests. Be ready to give your opinions when asked, and always be there when customers need support.
Give Discounts and Promotions
Customers always look for companies that reward them once in awhile. Regular promotions and discounts are primary reasons that people start to follow brands, especially online, and if your competitors don’t have special offers, a promotional program will grant you a tremendous and obvious advantage in the minds of consumers. It doesn’t hurt to occasionally give away free products and samples, or sell at discounted prices. Make sure to use the element of surprise rather than announcing special offers in advance, since this creates a lasting, positive impression on your clients: people will remember when you surprise them in a good way.
While giving away something of value may seem like a net loss for your business, research proves that it’s an investment - consumers are 30% more likely to shop with businesses that offer discounts, so this is a retention strategy you can’t afford to ignore.
Create Trust Through Shared Values
Building shared values entails developing an interest in your clients and their daily occupations. Do research to determine what your clients love to do as a demographic, what causes they support, and the media they consume. Using this information strategically in content, branding, and product development strengthens the image of your business tremendously for existing customers by tying your company with the things they care about.
Customer retention should be a key goal for your business, whether online or traditional. It is the foundation for expanding sales volume in the long term, and acquiring more clients in the short term. Hopefully the information listed here will help you to create and implement an effective customer retention plan!
Learn more with these related OMI classes:
Visit the Online Marketing Institute to browse over 400 classes in the digital and social media marketing space.