With so many small businesses competing against each other for customers, retaining customers is now as important as ever. Gaining new customers and building your audience is tough enough, let alone getting these people to return to your business. There are now so many similar products and services for people to choose from that few will stay with your business if they have just one negative experience with your brand. The strategy outlined below will help put your business in the best position to create loyal customers.
What is Customer Retention?
Customer retention refers to repeat customers, or those who continuously come back to your business. Customer retention should be at its highest for your target audience, which is the group of people who are a perfect fit for your business. While you want 100% of your customers who purchase your service to stay with your business, it is highly unrealistic that you’ll be able to pull this off. Instead, set reasonable goals for getting the same customers to keep coming back.
Importance of Customer Retention
Customer retention is important for several reasons. First, retaining customers is statistically proven to increase sales and improve your brand reputation. The second reason why customer retention is important is because it helps you to refine the appeal of your business to your target audience. Maintaining relationships with your loyal customers enables them to feel comfortable enough to give you suggestions for your business, which are often the most powerful ones. Your loyal customers are the best representation of your target audience, which means that you should use their wants and needs as a guide for making your business even more ideal and attractive to customers.
A third way that customer retention can help you gain more clients is through customer referrals. Knowing that someone has been utilizing your business for the same services over time – even if that person is a mere acquaintance – immediately increases a person’s likelihood of choosing your brand. You can encourage loyal customers to tell their friends about your business by offering special discounts on their next purchase for every new customer they refer. Check out our referral program ideas for more ways to retain customers.
Client Retention Strategies
Now that you understand customer retention, it’s time to learn how you can retain the most possible customers. One way you can retain customers is by personally interacting with them.
Sending thank you notes or seasonal greetings, learning the names of customers, and personalizing your services towards them are all great examples of personal interactions. Make your customers feel like the unique individuals they are, not just another member of your audience, and you will stick out in their memory.
Another way to retain customers is by prompt and continual communication. For example, if someone messages you a question on how to use your product, respond as soon as you can, thank them for their email, and provide them with a friendly and thorough answer. You may even want to check in with them a week after to make sure they are set with what they need. Urgency and thoroughness in your response shows customers that they are valued, which will make them much more likely to share their positive experience with others. Personally interacting with your clients can attract more customers to your business through word-of-mouth.
Customer Reputation Management
According to Founding Father Benjamin Franklin, “It takes many good deeds to build a good reputation, and only one bad one to lose it.” For example, a restaurant might face a case of food contamination, which hurts their reputation and causes them to lose customers. Once the issue has been resolved, the restaurant may offer free coupons in order to get former customers to come back to their restaurants. Customer retention isn’t just about keeping customers, it’s about keeping customers happy and maintaining their trust in your product or service. Free offers are not just great marketing promotions for new customers; they can be effective remedies for existing but unhappy customers too.
Customer Behavior Tracking
Another way to retain customers is by tracking their behavior in response to your marketing efforts. This will enable you to ensure that all of the marketing platforms you use are actually producing leads for your business. Set up tracking and analytics for all of your marketing platforms so that you can use data to see what’s working and what can be improved, not just educated guesses or personal opinions.
Some useful tracking efforts include varying the time of day you post on social media, trying different email subject lines for your monthly newsletter, and testing out different topics on your blog. Analytics platforms such as Google Analytics will help you to determine which options elicit the most engagement from your audience by measuring clicks on buttons, email opens, content downloads, and even time spent on your site. This may sound a little overwhelming and maybe even intimidating, but the good news is, you don’t have to be a data scientist to use analytics.
Many analytics platforms are geared toward non data scientists, and offer a wide range of tutorial content to help you familiarize yourself with their platform. It will require some time and a little trial and error, but tracking pays off in the long run for customer retention. The more you can understand the behavior of your customers, the better you can cater your services to them and keep them coming back for more. Tracking and analytics are great tools for improving customer retention.
Customer Loyalty Programs
Another effective way of retaining customers is by using customer loyalty programs. Customer loyalty programs are programs that businesses can use to reward customers who continually buy your products and services. Basically, you are incentivizing people who purchase from your business to keep buying.
There are many different ways that businesses keep customers through loyalty programs. As previously mentioned, having a referral program for your business can encourage current clients to tell their family and friends about your business with the hopes of getting a nice gift in return. Another idea for a loyalty program is creating a system that offers a bonus to customers every time they spend a certain amount of money at your business. Having exclusive discounts and sales for members of the loyalty program is just another way you can make customers loyal to your business.
Retaining customers takes a bit of time and effort, but these strategies can help your customers stay loyal for the long haul. To encourage your current customers to continue buying your services, it’s a good idea to have positive interactions with your customers, maintain a strong reputation, use analytics, and create a customer loyalty program for your business. If you want to learn more about customer retention, check out some of our other techniques for retaining customers!