Acquiring new customers is a driving force that motivates all companies, but it's not without its limitations. For a business to thrive, it must eventually shift its focus to retaining the customers it's acquired, rather than only landing new ones.A client or customer who stays with your company over time gives you the chance to provide more ongoing value, develop more personalized content, nurture a brand advocate, gain referrals, and earn positive word-of-mouth marketing.
All of this is in addition to the fact that it costs less to retain an existing customer than it does to acquire a new one, making it a smart move for your customers and your bottom line to keep current customers coming back.
Research has shown that a 5 percent increase in customer retention rates can increase profits by anywhere from 25 to 95 percent. In addition, not only does it cost five times more to acquire a new customer than to retain a current one, but it also costs 16 times more to get new customers to the same spending level as existing ones. Despite all this, less than a third of business leaders consider customer retention a priority.
That could be due, in part, to the fact that the strategies for retaining customers are very different from the ones used to acquire new customers. While customer acquisition relies on your ability to reach and attract new audiences, customer retention is more about ongoing engagement, personalization, and value provided over time.
But by analyzing factors like purchase history, search history, and customer feedback, you can implement marketing tactics that better facilitate engagement using personalized content that delivers value — targeting your customers and clients with better messaging around the products and services they're already interested in.
People want to work and spend money with brands that make them feel special. And at a time when customers are looking for ways to meet their needs in faster, easier, and less expensive ways, your ability to keep them feeling important via highly targeted, customized messaging and offers will be key to retaining their business.
Shifting your marketing strategy to retaining customers doesn't mean you won't get any new ones, but it does give your company a way to turn existing customers into advocates who can help drive acquisition. For your company to shift its focus and retain customers, it must rethink customer relationships and take advantage of marketing tactics designed specifically to engage its existing clients and customers. Here are four ways to get started:
Email marketing is one of the most cost-effective ways to retain customers. Ongoing email engagement is a solid part of any marketing strategy, so share new content, relevant offers, and updates as they're available. For customer retention specifically, consider strategies that contact your customers when they're about to run out of your product, when they leave items in their cart, when it's been a while since their last transaction, or on a special occasion to deliver a unique promotion.
Many companies host some form of a customer appreciation day or week that gives their loyal customers the chance to save on products they know and love. This can be helpful for giving customers even more reason to continue purchasing and demonstrating that you value what they do for your company.
Another good way to show your appreciation for your clients and customers is to engage them in a fun contest and reward their participation. For example, a year or so ago, Influence & Co. held a social media competition in which it asked followers to post pictures of someone who meant a lot to them and thank that person for being their #TopofMindMVP. Everyone who participated was entered in a drawing to win a free copy of John Hall's book, "Top of Mind." You can do something similar exclusively for your existing clients, which will help strengthen your relationship and make for a fun exchange.
Customer retention is about more than just the products and services you offer — it's about the experience you provide for your customers. Organizing and optimizing your website content to easily provide additional information and education about your products, services, and industry as a whole will make you a trusted, go-to resource for customers.
And when they see you continue to communicate your thought leadership, the trust between your brand and your customers strengthens. This helps you stay top of mind and gives you an opportunity to further recommend products or services based on a customer's search trends and website activity.
It almost goes without saying that people love a good rewards program. Earning points toward free stuff, discounted rates, and upgrades to current purchases is a great way to get your customers coming back to you to meet their specific needs. Referral rewards are another way to encourage customers to get the most out of your products and services and continue working with you. Plus, by rewarding current customers who refer new users, you can encourage customer retention and acquisition at the same time.
While acquiring new customers is a fantastic way of building up a strong client base, its effects are limited without effective marketing that keeps customers coming back to you over time. Find ways to make your customers feel special and important through your messaging and offers. Doing so will help you build strong brand advocates and give your company the competitive edge it needs to continue to grow and succeed.
Stacey Wonder is a content marketer for EssayTigers. She has vast experience in developing content marketing strategies and creating blogs. When Stacey is not busy with her main project, she likes to write about diverse topics, such as education, career, writing, marketing, and self-development.