Customer Retention: A Marketing Goldmine

In the complex, competitive cycle of recruiting new customers, many businesses make the huge mistake of overlooking the valuable customers they already have. According to Forbes, however, it’s nearly 7 times less expensive to retain an existing customer than to gain a new one.

Customer retention is an ongoing process – a constant cycle of building relationships. On the other hand, businesses only gain customer loyalty by continually proving value and measurable ROI. The “secret” is as simple as the following:

Keep your customers engaged. One sale doesn’t guarantee loyalty, so don’t assume customers will automatically keep using your product or service. To avoid this risk, make an effort to stay in touch. Alert your customers to promotions, rewards programs, product updates, and any other content you think they’ll find interesting and relevant. Ask people to share their stories. Hold friendly contests to encourage engagement. Stay a step ahead by anticipating future challenges they may have and suggesting new solutions. If you haven’t heard from particular customers in a while, don’t be afraid to reach out to them.

Remember: The longer the silence, the less value customers will put on your brand – so keep that conversation going! Even if your efforts don’t result in immediate sales, they’ll go a long way toward helping your brand stay in the top of your customers’ minds.

Make the most of social media. Not only are social networks like Facebook and Twitter essential to help convert leads, but they are also extremely useful in maintaining customer contact after the initial sale. Consider that:

• 30% of brands experience increased customer loyalty after establishing a social media presence (“Tackling the Social Challenge.” Episerver, 2012)
• Customers are 51% more likely to make a purchase after “Liking” a brand on Facebook (Social Commerce Playbook. 360i, 2012)
• 62% of consumers have used social media for customer service issues (“Social Media and the Future of Customer Support.” Zendesk, 2012)

Social media offers a great opportunity to engage and build trust by showing the personal side of your business. It’s also a way to monitor your customers’ opinions, interests, and motivations – which means you can pinpoint (and reward) your most loyal customers, or make efforts to change any negative perceptions other followers may have. And of course, don’t forget customer service! More and more consumers are using Twitter, Facebook, and other social media platforms to ask questions, register complaints, and resolve product issues.

Get personal. A key component of effective customer retention is the way in which your customers perceive your attitude toward them. Many customers place greater value on friendliness, comfort, and familiarity than they do on the actual features of your product. A few small actions can transform your business from a faceless corporation to a friendly and accommodating partner in your customers’ eyes. For starters, try the following:

• Customize your offers around actual customer behavior (via analytics) rather than trying to make predictions based on general demographics.
• Recognize your loyal customers by name. Show your appreciation with coupons, special offers, sneak previews, or thank-yous. Invite them to forums, or ask for feedback to let them know that you value their opinions.
• When customers have problems, make sure they can speak with a real, sympathetic person (ideally by phone) to find resolution. Referring already frustrated consumers to a FAQ or an email contact will only drive them to seek more accessible solutions for their needs.
• Make sure your employees are empowered to fix problems when they arise. Employees who are kept well-informed and believe that they can make a difference will be more motivated to care and take responsibility.

A truly personalized customer experience will help build reliability and trust around your brand, as well setting you apart from the competition. Don’t hesitate to add that special touch!

Take responsibility. Your brand is only as good as the reputation behind it. Customers will hold you to account for any flaws in your finished product – even if they aren’t directly your fault. So, when problems do arise, admit to your mistakes – and apologize if necessary. Honesty demonstrates authenticity, while letting customers see that you’re willing to correct faulty processes and prevent future mistakes.

Timing is particularly important when addressing customer issues. Your customer support actions should match both the brand image you want to convey and your customers’ expectations. 50% of consumers give business 1 week to answer questions before they go elsewhere – but you should tailor your response time to fit your business model. For example, if you market a product or service to prevent process failure, you shouldn’t take 24 hours to respond to customer when things go wrong.

Bow out gracefully. It’s never easy to lose a customer – but if the result is unavoidable, always end the relationship on a good note. Remember: how you handle a customer’s departure can determine whether they’ll give you another chance down the road or disappear entirely and leave you with a bad review. Be sure to thank customers for doing business with you in a personalized letter or email. If possible, find out their reason for leaving, and whether they have any suggestions for improving your products or services. Close the communication by inviting the customer back at any time and providing easy ways for them to reinstate their account – as well as to contact you, follow your social media, ask questions, or access your brand in any other way at their convenience.

Never underestimate the value of effective customer retention. Maintaining a positive brand experience for existing customers is crucial to a productive relationship – and a strong ROI for your business.

Although it’s easy to believe your work is complete the minute a prospect becomes a customer, in reality, that’s only the beginning.