Did you know that the average company loses roughly 20% of its customers each year by simply failing to attend to their needs?
Losing customers not only means you lose money, but you lose the resources used in trying to convert them. You shouldn’t let that happen to your business.
What We’ll Cover:
What is Customer Retention?
In marketing, customer retention refers to the process of engaging existing customers to increase profitability. Put simply, customer retention tactics keep clients happy and help turn them into repeat buyers.
Interestingly enough, most companies are hyper-focused on acquiring new customers instead of retaining the ones they already have.
But in reality, it’s much cheaper to focus on the latter. In fact, it’s actually 5 times more expensive to acquire a new customer than to retain an existing one. And increasing customer retention rates by 5% is estimated to increase profits by 25-95%.
The best part is the impact of customer retention will compound over time. Even the smallest change in customer retention can send a ripple effect through a business system and multiply. The resulting outcomes on long-term returns shouldn’t be underestimated.
With that being said, let’s dive into some of the specific sales retention strategies you can implement for little-to-no cost.
Tactic #1: Gift-Giving
Gift-giving is one of those age-old customer retention tactics that just works.
Whether it’s a gift, a voucher, contest, or a valuable piece of content (ebook, whitepaper, etc.), most people enjoy the experience of getting something for nothing. Giveaways and gifts appeal to customers’ sense of “scoring a deal” and convey your company’s generosity—in other words, the type of business that they want to provide services for them.
By going the extra mile, your clients will be surprised and impressed, significantly increasing the likelihood that they’ll return and give you their business, particularly if you send them a gift on a monthly or quarterly basis.
Be sure to pay close attention to your customers’ favorite hobbies, sports, and music, and invest some funds to deliver a gift that’s targeted to their specific taste.
Tactic #2: Offering Promotions
Another great way to secure loyalty and drive traffic to your brand is by offering discounts or promotions. According to RetailMeNot, more than 95% of consumers use coupons, which means you already have an audience primed to make a purchase if there’s a value-added offer available.
Luckily, there are several ways you can go about this. For example, when shipping a product, you can include a coupon or free shipping code they can use on their next shopping spree.
You can even run promotions during off-peak sales periods to entice consumers to stock up for the season.
Sephora often lets users select a few free samples during checkout. Not only does this expand shoppers’ knowledge about your product offerings, but encourages more sales in the future.
Tactic #3: Hosting Customer Events
Getting an invite to an exclusive event is a surefire way to make someone feel special. Therefore, it should come as no surprise that hosting a customer event is one of the best customer retention tactics out there.
It helps re-connect customers to your brand and not to mention, they get to interact with your team face-to-face!
Here are a few event ideas that are guaranteed to get your clients to engage with you:
- Learning event—Here, you want to focus on educating your attendees. Consider a “how-to” webinar session or a refresher on how to use a specific product.
- Just-for-fun event—Ignite Visibility recently hosted a wine tasting event where customers were able to mingle and get to know the team on a more personal level.
- Charitable event—What’s better than hosting an event with a noble purpose tied to it? You can retain customers while also helping a worthy cause—a win-win for all.
Tactic #4: Setting Customer Expectations
If you want to maximize revenue, you need to understand what your clients’ wants and needs are and use it as a foundation for setting customer expectations.
Doing so will give them something to look forward to from your brand. However, it’s crucial that you adhere to the old business truism of under-promising and over-delivering.
Setting reasonable expectations requires that you develop specific benchmarks for customer satisfaction, which vary from business to business.
Tactic #5: Delivering Top-Notch Customer Services
Without a doubt, consumer behavior has evolved. It’s consumers who now dictate to brands how, where, and when they’re ready to engage.
Therefore, it’s up to you to provide a seamless customer service experience, whether users are reaching out to you on-site, through email, or via social media.
Having a live chat option or help desk tool on your website can put you on the fast track towards converting a customer question into a sale or a customer complaint into a resolution. More often than not, an effectively resolved issue can turn an unhappy customer into a brand loyalist, whereas poor service can drive them to your competitors.
To avoid this situation, make sure you respond to inquiries immediately and go above and beyond the call of duty.
Tactic #6: Measuring the Net Promoter Score
Adopted by numerous customer-centric organizations around the world, the Net Promoter Score is one of the most popular ways to measure business performance.
This metric is based on the response to the question—“How likely are you to recommend us to a friend or colleague?”
Beginning with a 0 to 10 point rating scale, the Net Promoter Score helps determine the level of loyalty among your customer base, helping you identify and address the concerns of those who are unsatisfied with your brand.
Customers who score a 7 or 8 are known as “Passives.” These consumers are generally satisfied, but indifferent.
“Promoters” are consumers who score 9 or 10 and typically refer others to your brand and buy from you frequently.
”Detractors” score between 0 and 6, which signifies the group who are unsatisfied and have the potential to hinder your company’s growth. To determine your NPS score, subtract the percentage of Detractors from the percentage of Promoters.
Tactic #7: Having a Continual Customer Feedback Loop
It’s hard to grow your business if you’re unsure of how your customers feel about it. If you don’t already, you need to have a process in place for obtaining that customer feedback so you can share it with the rest of your organization.
A customer feedback loop creates a system that allows you to collect, analyze, and distribute customer reviews.
Don’t be shy about asking your customers to participate in focus groups and surveys. The responses will equip your team with ample and relevant information.
Once gathered, analyze your findings by looking for trends in consumer behavior and areas where you can enhance the user experience.
Tactic #8: Including Customers in the Customer-Planning Process
At first glance, this notion might seem strange. Historically, companies would create the products, while customers were expected to buy from them. Isn’t that the way business works?
But, there’s a lot of power in involving customers in the customer-planning process. For one, it makes them feel more invested in your brand and communicates that their voice matters. Not to mention, you’ll get an influx of new ideas at no additional cost.
Give your customers the opportunity to contribute their ideas and collaborate with one another so that they can end up with exactly what they’re looking for. This can be facilitated through social media, via online submissions, or through other means.
Tactic #9: Personalizing Experiences
Personalization is no longer a luxury for big-name ecommerce brands. In fact, as one of the key sales retention strategies on this list, personalizing the shopper experience has become an expectation of the modern customer.
Without it, your business falls victim to treating every consumer like just another transaction. Instead, try segmenting your customers so you can send the most relevant messages to them at the most appropriate times.
Regardless of the channel or device, tailor your content to your customer across multiple touchpoints.
Tactic #10: Reaching Out to Customers
Even if your customers aren’t reaching out to you directly, that doesn’t mean your team shouldn’t be proactive with its communication strategies.
If you have the resources, you need to build a dedicated customer retention team that can better serve your colleagues and your customers.
These people know the appropriate metrics to track, which strategies aren’t working, and how to pivot accordingly.
If you want your business to succeed, taking your customers for granted is the last thing you should be doing.
Instead, be sure to leverage the above-mentioned customer retention tactics to keep them coming back for more while also boosting your bottom line.
It’s time to get moving and start nurturing those relationships. Your customers are waiting to hear from you!