One of the biggest difficulties for a business is creating growth and marketing products and services. Businesses put a great deal of effort into this—trying to get new customers to walk through their store, follow them on social media, or visit their website. Although businesses need new customers, it’s important to strike a balance between efforts to find new customers and the efforts to keep existing ones.
The importance of customer retention, or the practice of keeping current customers loyal to your business, cannot be understated. In fact, according to the Harvard Business School, “increasing customer retention rates by 5 percent increases profits by 25 percent to 95 percent.” So, how do you build customer loyalty and retain existing customers? Here are 7 highly effective customer retention techniques to use for your business.
What is Customer Retention?
Customer retention is the effort a business makes to keep past and present customers coming back to their business. Not only is this important for getting customers to return, but also it allows customers to see that your business has a genuine interest in keeping customers engaged and feeling appreciated.
A major factor in customer retention is customer loyalty. Customer loyalty is about creating a bond between the business and the customers, providing them with unforgettable service and value. Customer loyalty isn’t the only thing that keeps customers from coming back—that’s where customer retention techniques come in.
Although businesses have always desired to improve customer retention rates, the way they go about doing this has changed drastically. Technology like social media has enabled businesses to reach out to customers in ways that was impossible just years ago. For example, businesses of all sizes employ things like email newsletters and social media so that they can directly communicate with previous customers.
There are a number of other techniques that your business can start implementing immediately and in the near future. Here are 8 techniques that can be implemented in any customer retention marketing program:
1. Focus on Customer Satisfaction
Did you know that angry customers cost companies $5.9 Trillion every year? Additionally, more than half of U.S. consumers have switched companies in the past year due to poor experiences. This is perhaps the largest reason for customers staying, and leaving, a business. A large emphasis should be put on keeping customers happy by giving them a positive experience every time they interact with the business.
2. Make Interactions Personal
People often have difficulty associating businesses with building connections and relationships. They view businesses as unattached entities that don’t appreciate them. To keep customers coming back, make them feel wanted. Your business can create tailored programs to alter the offerings to different users, making it feel like the business is going the extra mile to please them. You can also use A/B testing through social media and email marketing to gauge specific interests of your customer base.
3. Build a Community
What is it about Apple and their business model that has loyal customers lining up awaiting the release of a new phone? Community.
Sure, the argument can be made for a superior product, but what really keeps customers coming back is knowing that they’re part of a community. They know that others are going to be using Apple products and they don’t want to feel left out of the mix.
If you’re a brick and mortar business, consider hosting events for customers that will allow them to meet other like-minded individuals in the area.
4. Offer Instant Rewards with No Strings Attached
You may have noticed that many websites and businesses send out email newsletters with coupons periodically. This is very enticing, even for those customers who aren’t regular as it gives them a reason to reengage with the business. They may even wonder why they ever left!
Make sure to obtain some sort of contact information from your customers. Avoid spamming them and sending irrelevant content their way, however, don’t be shy about reengaging them. They came to your business at some point, so there’s no reason they can’t return.
Businesses have begun to implement rewards programs that reward customers for their loyalty. For example, when customers spend a certain amount, they will be rewarded with points that can ultimately be redeemed for something.
Giving these customers something to work for in the long term is going to make them want to return to your business as opposed to your competition.
6. Create a VIP Program
A different variation of the loyalty program would be to create something along the lines of a VIP or Gold Program, something specifically designed for high-level clients. This would enhance customer retention because it a.) Offers additional services to customers in need and b.) It gives customers a reason to invest more into the business, because they have already made an initial investment and they feel obligated to get their money’s worth.
7. Embrace the Freemium Model
Major Websites like Skype and Dropbox have become massive companies, despite the majority of users using their free service. This works because although most users will not pay for the service, many will, but without the free option they never would have stayed around in the first place.
There a couple different ways this can be done like Skype, or even with games like Angry Birds, in which your business offers a fantastic free program that will engage a huge audience. You can also create a free 30 day trial, or something similar, that will automatically enroll users in the program if they decide not to opt out.
It goes without saying that your business should have several different social media platforms, including Facebook, Twitter, Instagram, and LinkedIn. Social media give your business direct access to users and can update them about any deals or specials. It’s also just an easy way to find and maintain customers on your radar.
Putting It All Together
In your businesses efforts to increase customer retention, the above techniques should be implemented wherever possible. But at the end of the day, don’t forget about quality customer service, as that is the foundation for not only happy customers, but building a great business as well.