Customer retention, or customer loyalty, is one of the most important aspects of sustainable success. But it's often overlooked.
How to win customers and influence the ones you have
“Customer satisfaction is worthless. Customer loyalty is priceless.” – Jeffrey Gitomer
Having more customers is better than having less. More customers mean more sales. And more sales mean more profit. Customer acquisition plays a big part in making that happen, but there's another type of customer to which you can never forget to show a little love: your current ones.
"The stats," as we'll call them, show that it costs more to obtain a new customer than to retain an existing one. According to OutboundEngine:
Acquiring a new customer can cost more than five times more than keeping a current one.
The success rate of selling to an existing customer is 60-70%, as opposed to 5-20% for a new customer.
Increasing customer retention by 5% can boost profits between 25-95%.
Loyal customers are five times as likely to repurchase, five times as likely to forgive, four times as likely to refer your business, and seven times as likely to try a new offering.
The takeaway is pretty straightforward. While creating new leads is crucial for growth, keeping your current customers happy is equally important. Your marketing plan should include a dedicated focus on retaining customers and giving them an enjoyable experience with your product or service. The more they enjoy the experience, the more likely they will remain loyal customers.
“Get closer than ever to your customers. So close that you tell them what they need before they realize it themselves.” – Steve Jobs
Attention is one of the most prized commodities in the 21st century. In a business context, part of marketing's role is knowing how to capture and sustain the attention of your existing customers, past customers and your prospects. We achieve this in three basic ways:
A strong brand ensures consistent messaging and a cohesive visual identity. It can help your business form a deeper, more emotional and value-based connection with your customers. Your brand might reflect who you are, but the most successful ones resonate with customers by showing them something they value, too.
Engagement keeps your customers interested and, well, engaged with your brand. These opportunities happen in-person, on social media, in your advertisements, emails, and every other touchpoint between your business and your customers. Once you have their attention, you have to work to keep it. Engaged customers are often happy customers and are likely to stay with you longer.
Marketing should embrace meaningful data about your customers. Some of this data can be gained by integrating feedback loops at the heart of your business processes to understand your existing customers' needs better. This feedback might include the level of demand for certain products and services or the type of content they like to consume and how they like to consume it. If there's one way to serve your customers better, it's by truly getting to know them.
A hidden key to customer retention? Surprise and delight
Give your current customers some surprises along the way. Things like a personalized thank-you note can go a long way in sustaining a business relationship. Give attention to your existing customers and provide them with something beyond the transactional. Because rest assured, customers are in a constant state of decision. They might love your business today because you do great work, but if another company comes along that offers something similar, the way you show that you understand and value them is what is going to keep them.