Most people think that the best way to generate sales revenues is to acquire new customers. Therefore, you will find businesses spending money on marketing their products to new customers. The truth is that these new customers do not know your business better than existing customers. Hence, they are unlikely to make a purchase compared to existing customers. If you are a business owner, you ought to understand that it costs five times more money to acquire a new customer than to retain one. Therefore, if you want your business to continue to grow, you need to keep your loyal customers coming back.
Studies have shown that returning customers are likely to spend more money than first-time customers. This is because existing customers have bought from your business and will likely spend more if they were satisfied with their first purchase. According to a study done by the Havard Business School, a 5 percent increase in customer retention can increase your business profit between 25 percent and 95 percent. With this amazing stats, it’s safe to say that customer retention is more effective than customer acquisition. So how can you keep your loyal customers coming back? Here we will take a look at different customer retention strategies.
Keep in Touch with Them
Communicating with your previous customers is a good way to show that you care about them. If they were pleased with their previous purchase, they would want to know which new products you are offering. You can keep in touch with them through newsletters so that they can know what new is happening in your business. You can also reach out to them through promotional emails to entice them with new products or services that your business is offering. Another proven way of retaining customers is by sharing educational content via email. Sharing industry knowledge about the products to your customers can help build customer relationships and trust.
Engage with Customers
In today’s digital era, it is easier for businesses to engage with their customers through platforms like Facebook or Twitter. Thanks to Artificial Intelligence like Chatbots, it is easier for businesses to engage and respond to customer feedback at neck breaking speed. This has led to improved customer service leading to customer loyalty and retention.
Give Gifts to Loyal Customers
Giving gifts to loyal customers who contribute significantly towards your sales revenue is an effective way of retaining them. You can also include an invite only to a VIP club to make your loyal customers feel special. This will differentiate your business from competitors, helping you retain the best customers.
Say Thank You
Everyone likes to feel appreciated, which is also true with existing customers. If a customer purchases from you, you can
extend your appreciation by sending them a thank you message. Write a personal email message and send it together with coupons for their next purchase. This will go a long way in retaining your loyal customers.
Why You Should Retain Existing Customers
1. Low Advertising Cost
Because existing customers understand your business better, you don’t need to spend too much money marketing your products or services to them, like you would do with new customers. In addition, existing customers can provide you with useful feedback about your product. This can help you know which improvements you should make.
2. It is More Profitable
Studies have shown that retaining loyal customers is profitable for your business since they are likely to spend more the next time they buy. Unlike new customers who might not buy from you when your product is overpriced, existing customers will not care too much about the price increase.
3. They Will Market Your Brand
When you build loyalty with existing customers, they will share the message about your brand through word of mouth. Hence, you will be able to get more customers to generate more sales.
There is no doubt that retaining your customers can help grow a sustainable business. However, as a business owner, you should remember there is no shortcuts to establishing a personal relationship with customers. If customers like your products, they
will always come back. However, if they were not pleased with their previous purchase, it is unlikely they will come back again. Instead of just using customer retention strategies, you need to make sure that the products and services you are offering is top notch. As customers become satisfied with your top notch products or services, customer loyalty will be guaranteed. Hence, your best customers will keep coming back to buy from you.