The amazing tools and environment available to entrepreneurs today—which include the Internet connecting us to new customers—make it easier for anyone to be an entrepreneur, including your competitors. So, it’s vital to understand how to retain customers for the long-term through customer retention strategies.
The Monetary Value of Customer Retention Strategies
Like many entrepreneurs you have probably figured out the lifetime value of your customers. You’ve probably also figured out your cost to find each new customer. After seeing those numbers, wouldn’t you rather continue selling to the same customers over and over than spending more than is necessary to acquire more customers? How much money would that save you—and make you?
Churn (customers opting out of a relationship with you) is much more common among first-time buyers. Once you’ve re-sold to customers several times, they’re much more likely to stay with you and place larger orders. And this becomes the easiest sales job in the world, in which you ask customers if they want to buy, and they say “yes” every time.
The Top-Level of All Customer Retention Strategies
Just remember that some customers have to stop buying because they’re simply finished with your product or service, not because they’re dissatisfied. We’ve all done that. But for the rest, you need to do two things:
- Identify, through whatever type of communication you can, why customers are leaving, why they’re dissatisfied, and why they’re picking your competitors.
- Craft customer retention strategies to directly answer the main complaint(s) you discover.
Think about this: if you can hold onto more customers, it will build your reputation and increase your sales even more as other prospects start to notice. So, focus your energy on doing all you can to satisfy your best customers, who are the best fit for your business. As you do that, you’ll find more and more ways to serve them and find more just like them. And as you do that, they’ll open up more and give you the kind of feedback that will help you improve your business even more.
So let’s discuss three customer retention strategies for small businesses and medium-sized businesses. Once you have great strategies in place, you can continue to use them as you scale.
1. Create Advocates
This strategy focuses on building relationships with your ideal customers and with influencers. We’d all like to retain 100% of our customers, but that’s not realistic. Instead, we need to build relationships with the customers who want and need us most.
After their first purchase, try to make them more loyal to your brand through techniques that include:
- Inserts with each shipment
- Social media campaigns
Focus on catching their attention in personalized ways that a large business might not think to use. While you still have the time and focus of a small or medium business, practice and perfect your techniques.
Personalize messages with any information that you have gathered that will be special to customers. For example, a lawn care company that has gathered information about clients’ pets could send personalized dog bones to those pets. Your Green Pal, which connects homeowners with lawn mowing services, actually did this, and received social media posts back with videos of dogs chewing on the gifts!
Your ideal customers can become the most credible advocates for your business. If their friends—or even casual acquaintances—hear that they’ve bought from you, they’ll be far, far more likely to buy. An unbiased recommendation is worth dozens of your own marketing pieces.
Some natural attrition of customers can’t be helped. But mentions from your loyal customers can keep you ahead of it. You might even start a customer loyalty program to reward your best customers for making the purchases they would have liked to make, anyway.
2. Practice Better Communication, Which Is Really Customer Service
Around 70% of customer churn is due to poor communication and customer service. So, simply treating people right through good communication can save you a lot of money! This includes setting up quality ways for customers to get in touch with you—even to let them complain. In fact, a customer who respects you enough to complain and let you fix a problem is better for you than one who just walks away without telling you why.
So, make sure your customers have good ways to complain, to be heard, and to have problems fixed. Sometimes just being heard is all they need in order to remain your customers. Some studies have even found that a customer who has a problem and gets it fixed is more loyal than one who had no problems.
Here are some ways to improve two-way communication with customers:
- Keep your Contact Us page up-to-date and intuitive to use.
- Put phone numbers in the same place on every page of your website.
- Give out the manager’s or owner’s email address, rather than a general inbox.
- Make sure someone answers your phone after three rings or less, since many people hang up after that.
- Avoid making customers leave a message, because they’ll often assume no one will get back to them.
- Hire and train staff so that anyone in the company can answer key questions about your business and your industry, including receptionists and others who interact with customers the most.
3. Track Responses to Marketing and Other Communications
Try out different methods of marketing and different variations within each of those methods. Then, track the results of every single thing.
Why? To see what your customers and prospects respond to best, giving you another way to customize your marketing, communications, and materials to their needs and tastes. This creates repeat customers.
If you’re not technically savvy with analytics, start small! Just get into Google Analytics or another platform and find out how to add tracking to each of your efforts—or see the tracking that is already there. Contact the platform’s service team, if necessary. They have good people, articles, and videos to help beginners and experienced users.
Once you’ve at least set tracking up, you can focus on just one of your marketing methods. Watch what happens. Watch how your numbers change with each instance. Once you have figured out one, start tracking another one.
Then, try some tests. Here are some variations to try:
- Try different blog topics or headline variations to see if the number of visitors changes
- Test variations of subject lines in emails or newsletters
- Post to social media on different days of the week and at different times
Your analytics platform can record data on how many times your customers open emails, click on links or buttons, or download your PDFs. It can also show you what web pages your customers spend the most time on.
Focus on your goal: creating a better business for long-term customers who are advocates for your brand.