7 Customer Retention Strategies for Earning New Loyal Patrons
Lifetime customers have much more value for your business than those who make one purchase and never return. Attracting new customers costs five times more than retaining customers, and as a small business owner, you need to focus your efforts on the most cost-effective sales strategies. Start improving your retention rate today with these seven tactics.
1. Foster a Community Mindset
Customers should get more than a product or service when they do business with your company. Shoppers are loyal to brands with which they feel a connection or a sense of being part of something meaningful. Without this connection, they can easily be lured away by competitors offering lower prices or more desirable product features.
Giving your customers a community where they can interact with others who use and enjoy your products adds a lifestyle element to the shopping experience and encourages people to make more purchases. Marketing to this community is easier and costs less because they're already primed to receive and accept your offers, and they provide additional word-of-mouth promotion for your brand.
2. Make Your Brand Exclusive
Think about what attracts consumers to big brands and what sets these brands apart. Distinctive branding suggests that no alternative is able to provide the same level of quality and satisfaction. Strengthening your brand with a unique voice and attitude draws consumers who identify with your message and encourages those who are on the fence to consider the benefits of purchasing your products or services over those of your competitors.
With the right branding, it should be a no-brainer for consumers to choose your company. They'll begin to see your brand as exceptional and want to be part of the experience you offer. Pay attention to the tactics your competitors use, and study the strategies of well-recognized brands to get an idea of how to set your company apart by creating this type of exclusive atmosphere.
3. Deliver on Your Promises
It takes time to anchor your brand in customers' minds and build a community in which they can participate. Neither of these customer retention strategies will work unless you also make it a point to maintain integrity in everything you do. Customers appreciate integrity from the companies with which they do business, and making it a point to always deliver what you promise lays a foundation of trust on which you can build long-term relationships.
From product development to customer service, all aspects of your business must be in line with the promises you make to customers in your vision statement and marketing messages. Going the extra mile reinforces the uniqueness of your brand and reminds customers why your company is special.
4. Revive Dormant Relationships
People who have bought from you in the past but haven't made purchases in a while are likely to be receptive to marketing encouraging them to come back. If you've been diligent about tracking past purchases, you should have a database of these inactive but interested customers. Approximately 25 to 60 percent of them will return and make additional purchases if you reach out. Automating this process reduces marketing costs and allows you to track responses, helping you gain a better understanding of why customers stop making purchases and what you can do in the future to prevent their accounts from becoming inactive.
5. Turn Complaints Into Positive Reviews
Customer feedback is invaluable, even when it doesn't reflect a stellar opinion of your company. Make sure customers have a way to share information about their purchasing experiences, and pay attention to what they say. When something goes wrong, find out how you can make it right. Never leave complaints unanswered, even if all you can do is apologize for a poor experience and promise to do better in the future.
To ensure that you can keep such promises, evaluate all feedback for ideas on how to improve the customer experience. You don't have to take every negative remark to heart, but it helps to be open-minded about potential solutions to problems. Even something small like a complaint about there being too many fields on the checkout page can alert you to changes with the potential to increase customer retention.
6. Always Be Nurturing
Starting with the first point of contact, you should plan to maintain communications with each and every customer who interacts with your business. Follow up with them after purchases with questionnaires, thank-you notes and offers to help with any issues they may have so that they can get the most out of your products and services. A communication calendar or an automated email sequence can help you stay on track and make sure that you never miss an opportunity to show your customers that you care about each and every one of them.
7. Go Above and Beyond
A few small gestures can transform a good customer experience into a stellar one. Whether you drop a personalized note into every order or send free birthday surprises, customers appreciate the effort and like being recognized in these special ways. Automated reminders for customers who often purchase the same items can help frequent shoppers remember to make additional orders before they run out of their favorites.
Consider these and other places where you can do just a little more to show customers you care, and work with your employees to ensure that every interaction is positive. Train them to provide more than customers expect and to anticipate individual needs by reviewing the information you have on file whenever a service call comes in.
You have a 60 to 70 percent chance of selling to a loyal customer base compared to only 5 to 20 percent when trying to sell to new customers, so it's important to do all you can to maintain the most valuable connections you have for your small business. Part of that is maintaining the right insurance to help build trust with your customers and demonstrate a commitment to integrity. Contact Hiscox today to learn more about the insurance you need to attract and retain a strong customer base.