There’s so much emphasis on new forms of communication, contact, and customer service. But when it comes to clients returning to your business again and again, old-school strategies are more important than ever. That’s because repeat clients hold a lot of potential value for future profits and revenue—and they’re a lot easier to convert than brand-new clients.
Customer retention doesn’t have to be complex; in fact, there’s a simple four-part strategy that’s easy to implement and use. It involves making the experience for the customer valuable, simple, impactful, and personal.
How can you improve retention, and ultimately improve your business? This graphic helps you discover a process that works.
Graphic and intro provided by and included with permission from Salesforce.
It’s Easier to Get Sales from Existing Customers Than a New Customer
Considering that 80% of your profits will come from 20% of your existing customers, that makes a huge case for the importance of being able to retain your existing customers.
When you combine this knowledge with your actual probability of converting an existing customer (around 60 to 70%) to the much smaller probability of converting a new customer (about 5 to 20%), it should be clear that your energy and resources are best focused on keeping the customers that you already have.
In fact, you can increase your profits by 25 to 95% just by increasing customer retention rates by 5%.
Even small improvements in customer retention can have a significant impact on your bottom line.
Below is a great example of just how powerful a good customer retention strategy can be. Customer experience pioneer Lori Carr shares her expertise and how she helped Citrix Online realize $9M in revenue in just one year with a solid customer retention strategy.
Whether you’re a mid-sized company or a Fortune 200 enterprise, customer retention and expansion are survival priorities in today’s business environment, and increasing retention is a core strategy for remaining competitive and growing a company. There’s a paradigm shift happening now as it relates to your current customers’ perceived value and the direct link it has on profitable revenues —- and it goes way beyond the lip service promises we’ve been hearing over the past few years.
Based on statistics from Gartner, Marketing Metrics, Bain and others, we know that current customers make up the majority of future revenues. I think one of the things we need to do, as customer experts, is to talk about retention as the most overlooked, untapped revenue streams of our time — the “new” sales strategy, if you will — and how we can create and prove significant financial gain from improved retention. One top-tier cloud company, Citrix Online, realized a $9M preservation of revenue in just one year when they turned around a 2% loss in customer retention. Read about their successful approach in this Citrix Online Case Study.
Lori Carr is a customer experience pioneer and veteran consultant in the customer experience space. She’s held a number of executive practitioner roles and served a consultant to Fortune 200 companies and recognized brands like Bombardier Aerospace, Metlife, Monster and The Streee.com. For more about Lori, visit her website at Lori Carr Associates.
But just as there are benefits to having a good customer retention strategy, there are also consequences that come by ignoring or mistreating those same customers.
Did you know that 68% of customers will leave brands they feel are indifferent to them?
You don’t want to be one of those brands.
4-Part Strategy To Improve Customer Retention
The above infographic shares four key, yet simple strategies that you can incorporate into your customer retention plan to increase your sales.
1. Make it Valuable – This key point is something that I am constantly addressing in my content because I cannot stress enough just how important it is to the success of your business.
When you are creating and sharing content, remember that people (including previous customers) will be thinking “what’s in it for me”. So you need to consistently provide them with value that they cannot get anywhere else. You need to show them that you are the trusted expert that they can rely on.
2. Make it Simple – Your customers are bombarded with so much each day that they will only give most social media posts, content, webinars and emails a quick initial glance (even if they really like your stuff). If it is not simple for them to see the value right away, you will lose your opportunity.
You also want to make it easy for them to take advantage of any offers you share with them, so don’t make them jump through hoops to grab your newest report or use your latest coupon.
Always keep it simple.
3. Make an Impact – Once you have your customer’s attention, don’t waste it!
At every opportunity, you should be looking for ways that you can make a positive impact on your customers. Whether it is your amazing customer service, helpful content or an easy to navigate, mobile website, find ways to show them that their experience with your brand matters to you.
4. Make it Personal – The age of social media has made it significantly easier to find ways to personalize your customer’s experience when they engage with you and your brand. There are many ways that you can add that personal touch.
On social media, when responding to engagement, use the person’s first name when replying to them. Let them know that you are engaged and want to have a conversation with them, one-on-one.
Where possible include a first name in your emails and make sure the content in your emails speaks to a single person at a time. (For example, using you and yours.)
If you really want to add that little something extra, consider writing your customers hand written thank you notes or sending cards for special occasions.
If handwritten notes aren’t a practical option for you, try sending custom thank you cards using a service such as SendOutCards.
If you want to take your business to the next level, focus first on building relationships with (and satisfying) your existing customers. They are not a number or a drain on your resources, they are in fact your bread and butter and the biggest supporters you have to help you bring in new business.
So treat them with the respect and care they deserve.
Do you have a planned customer retention strategy for your business? I’d love to hear from you in the comments below what has and hasn’t worked with retaining customers in your business.