Your customer retention strategy is about keeping the customers you’ve invested in to acquire. And if you’re in an industry where customers make multiple purchases over the years, your entire team should be very focused on retaining those customers:
Customer retention rate
If you are an online retailer and you operate an online sales site, your customer retention rate is a major asset to keep your business afloat.
The customer retention rate is a loyalty indicator that refers to the number of customers who remain customers from one period to another.
A high retention rate means more sales and of course more profits. Loyal customers spend more than new customers, they are easier to market and are more likely to send referrals ( word of mouth ). In addition, acquiring a new customer can cost five times more than keeping a current customer.
Why retain your customers?
Every business absolutely needs new customers. Still, the easiest source of new revenue comes from existing customers who already know your online store and have already bought from you.
According to e-commerce experts, you must try to retain your customers, permanently.
An effective customer loyalty program allows you to identify, track and sell more to the customers most likely to become your source of long-term revenue.
Customer retention rate optimization is, in fact, beneficial for several reasons.
Best conversion rates
Existing customers have already purchased from you, so unless they have a personalized experience, they will buy again. You have already established trust, a fact that encourages the customer to come back.
You will spend less time and effort finding new customers, which means less costs. Building a long-term business relationship with a new customer is 16 times more expensive than keeping an existing customer.
Selling to existing customers is less price driven than selling to new customers. And because your existing customers already trust you, it’s easier to convince them to focus on more of your products or services through incentive sales strategies.
This will save you a lot of money! According to Bain and Company, attracting new customers will cost your business 6 to 7 times more than keeping an existing customer. While only 5% increase in customer loyalty can increase a company’s profits to 75%!
How to retain your customers?
Determine your retention strategy
Your value proposition and brand strategy should drive your retention plan. For example, if your value proposition is customer intimacy, your customers are counting on great service. If they’re buying on price, you’ll usually focus more on automating service to minimize costs.
Build your team
In some fields, the original sales rep is the best person to manage an existing client. For example, the account may require ongoing selling. In other cases it’s better to transition the customer to an account rep who focuses on day-to-day management.
Once you’ve determined the structure of your team, you have de know how many people you’ll need and start recruiting.
Market to existing customers
Put as much effort and time into your current customers campaigns as you put into the rest of your marketing programs. Know your audience, catch their attention, focus on the offer, measure your results. Use campaigns to nurture your customer relationships and encourage your customers to buy again. these campaigns aim also at expanding your relationships by cross-selling, up-selling and asking for referrals. You should also work on identifying customers who are at risk of defecting. You need to measure purchase intent and loyalty, not “satisfaction”
Many customers place as much importance on the quality of your service – friendliness, comfort and familiarity as the quality of your product. Remember that 70% of shopping experiences are based on how the customer feels they are being treated.
Start by personalizing the customer relationship based on the behavior of the consumer and your customers.
Show your appreciation with promotions, special offers, previews or thank you notes. Invite them to forums or ask for feedback to let them know that you value their opinions.
Social networks are extremely useful for maintaining contact with the customer after the initial sale. Social media offers great opportunities to engage your customers and establish a relationship of trust by showing the characteristics of your business.