Every new business owner learns that acquiring a new customer is far more expensive than retaining an old customer. The social media and digital age gives companies a free platform for marketing their products and services to their target audience, which makes it seem like this principle should be growing obsolete. But in truth, the cost of finding new customers is getting more and more expensive with every passing year.
How can this be? For starters, customers are more wary of businesses, making it harder to earn their trust. Consumers are more impatient than ever, and since they have so many options, they’re picky about where they put their money. The social media landscape is also becoming more saturated and isolated, meaning viewers aren’t clicking through to visit a company’s website or to purchase products.
All of these trends make marketing and acquisition more expensive than ever before, meaning smart business owners need to research new ways to find customers and — more importantly — keep them around.
What is a Customer Acquisition and Retention Strategy?
The term may sound fancy to some, so let’s clarify: what is a customer acquisition and retention strategy? At its core, this is the process every business goes through to acquire new customers and then keep them purchasing their products for a long period of time. The strategy usually includes marketing efforts like adding them to an email list, sending promotional deals, inviting them to participate in surveys, etc. Most companies develop a customer cycle as part of their strategy, starting with the customer’s first introduction to the company.
Keep reading to learn how to develop a customer acquisition and retention strategy in 5 easy steps.
1. Brainstorm Ways to Minimize Customer Acquisition Cost
Before you start thinking up ways to bring in new customers, you’ll want to do some research on how to reduce customer acquisition cost. You’ll avoid blowing your budget and have a chance to analyze where you can work smarter, not harder. Here are a few ideas to get you started:
- Upsell and cross-sell to existing customers
- Revamp your website to increase conversion
- Use A/B testing on Instagram ads
- Track your customer churn rates
- Automate your marketing
2. Build a Strategy to Last
Any customer acquisition and retention strategy should stand the test of time. Building a great strategy requires time and research — you don’t want to be doing this every few months. Make sure you can continue plugging along with the same marketing budget, creating the same amount of content, or paying the same size staff for years to come. Be flexible in your approach so you can adapt the strategy as your business inevitably changes over the years. You’ll also want to make sure your strategy includes:
- Targeted audience
- Measurable results
- Specific goals and objectives
- Ability to integrate with existing strategies
- Customize to your industry
3. Diversify Your Plan
Banking on one marketing method is never wise. Diversify your efforts by using several forms of marketing to reach new customers. If one type of marketing isn’t as successful, you still have plenty of chance for a win. Just make sure to choose avenues relevant to your target audience. It’s better to have 5 great marketing campaigns than to half-heartedly execute 20 different marketing campaigns. These marketing methods work for most of today’s businesses:
- Paid SEO
- Organic SEO
- Social media
- Email marketing
- Content creation (blogging, ebooks, video)
- PPC campaigns
- Offer free trials
- Guest blogging
4. Keep Customers Around
So you’ve hooked in a new customer? Your work has only just begun. Keep the customer loyal to your business by offering value they can’t get anywhere else. Customers come back to the same business for many reasons, so carefully consider why they might appreciate your product more than the competition. Great businesses offer value such as:
- Charity work
- Cool factor
5. Get Your Customers Working For You
Once you’re sure your customers love what you’re selling, it’s time to have them start working for you. (Figuratively, not literally.) Maximize your advertising by encouraging your customers to spread word about your business to their friends, family, co-workers, and social media followers. Though many people call this “free advertising,” it’s best to invest a bit of your marketing budget to incentivize your most loyal customers. Here are a few ways to facilitate word-of-mouth marketing:
- Referral program
- Feature testimonials
- Respond to reviews
- Ambassador program
- Create shareable content
- Affiliate program
Time to Get Started
By following these 5 easy tips, you’ll be well on your way to a customer acquisition and retention strategy that will stand the test of time. Though it may take you weeks or even months to finalize your plan, your efforts will pay off with a growing base of loyal customers and increased profits over time.