Many businesses make the mistake of putting all their efforts into winning new customers and forgetting about their existing ones. Existing customers are more likely to spend more money more often than new customers. According to Forbes, the chances of selling to an existing customer is 60-70%, compared to 5-20% with a new prospect. And research has found that existing customers spend 67% more than new customers. With all of this in mind, let’s discuss strategies for improving customer experience and keep them coming back for more.
The Psychology Behind Customer Retention
The key factors that affect how customers feel about your business are trust, reliability, convenience, and connection. If you can show your customers that you offer consistently good products/ service in a consistent way that is convenient to them, and that you value their time, money, and loyalty, you can build connections that will last far into the future. Keep these factors in mind as we discuss customer retention strategies.
Credit: Liza Summer on Pexels
Five Strategies for Customer Retention
1. Customer Experience
Creating a good customer experience is central to retaining customers. This includes:
- High-quality products/ services
- Competitive prices
- Reliable shipping/ delivery
- Excellent customer service
- Quick response times to queries, feedback, and complaints
A smooth and easy sales journey will encourage your customers to do business with you again and again.
2. Personalization
Personalization requires you to understand the wants, needs, likes, dislikes, and pain points of your target audience and, in this case, your existing customer base. Tailor product recommendations based on past purchases, send targeted emails based on browsing history, and take opportunities to cross-sell and up-sell new products/ services that are likely to be of interest to them. Always personalize emails and other correspondence so they feel valued by you as a business.
3. Feedback and Social Proof
Ask for feedback. It’s important that customers can share positive and negative feedback in the form of surveys, reviews, and direct interactions. Negative feedback needs to be addressed. Often a simple acknowledgment is enough, but if many customers report the same issues, you may need to change some of your operational procedures, such as offering free returns, free shipping, extended warranty, etc. Positive feedback can be displayed as social proof on your website, social media platforms, local directory listings, etc. Feedback helps your customers feel seen and heard and allows them to share their experiences with you and with other customers.
Credit: Karsten Winegeart on Unsplash
4. Loyalty Programs
Reward and loyalty programs are powerful tools for customer retention. Offering discounts, free products, and exclusive or early access to products/ services can incentivize customers to engage with your business again, as well as make them feel valued. It also helps to build a community within your customer base, which helps them feel connected to you and increases the likelihood that they’ll come back to you for more products/ services when they need them.
5. Social Media
Social media platforms are excellent places to build and maintain relationships with your customers. Customers can easily contact you with queries, feedback, complaints, or concerns, allowing you to respond in real-time, and provide the information they want, or quickly address unsatisfactory customer experiences. You can stay connected to your customers and keep your ear to the ground for changing wants, needs, and pain points among your customer base.
Conclusion
Customer retention is a core component of any business plan. As we’ve discussed, repeat customers are more likely to spend more money with you and spend it more often. They are also likely to recommend your business to others, whether online through reviews or social media platforms, or in-person to friends, family, and colleagues. Prioritizing customer satisfaction and promoting brand loyalty will help build a customer base that will support your business’ revenue and drive growth and profitability.
Was this article useful? Subscribe to my newsletter so you never miss a post.
