Simply Translate is specialised in providing translations for online business. We therefor frequently subjects relating to translations and being successful in running an online business.

SEO is not dead, and it is not going anywhere soon. In fact, there is a lot that SEO does for your site besides bring traffic – which means a lot more reasons to invest in it! I have compiled a list of my top reasons to invest in SEO and what else it brings you; read on to be convinced!

1. SEO is a cost-effective strategy

Compared to the costs associated with other forms of online advertising, such as PPC advertising, social media marketing, or purchasing leads for an email marketing program, SEO ranks as excellent in terms of ROI. This is because it is affordable, customizable to your exact needs and budget, and has the ability to land consistent and effective results. When done correctly, SEO can land you nonstop organic traffic that would cost a tremendous amount of money if it was a paid campaign.

2. SEO improves user experience

Search engines prefer sites that are optimized for mobile users, have good user ratings (high time on site, low bounce rates), and cleanly integrate useful videos or photos. If you have perfected your SEO, you have automatically improved your user experience. Your users will thank you in increased time on site, better brand loyalty, and a higher conversion rate!

3. Higher conversion rates

This one is common sense. If someone comes to your site through a Google search and stays on your site to read an article or shop around, when the popup for giving their contact information comes up, the visitor is already primed to give it to you! Unlike if you were cold-calling them, they are actively seeking out your service. Capitalize on this by providing a certain amount of free content, and offering to unlock other white papers or templates with a sign-up to your newsletter.

4. Higher ranking in local searches leads to greater visits and sales

Most customers now will look for a business online, even if they are searching for one in their neighborhood. It is incredibly convenient: they can search for specific products, read reviews of businesses, purchase online, or find directions and hours. According to Google, fifty percent of customers who searched locally visited the store on the same day. With a strong SEO strategy in place, you can be the store they visit – digitally or in person!

5. Your competitors are doing it

Yes, it is that simple. Everyone else is doing it, and if you do not – you will be left behind! Even if you have reached top rankings on the search results page, that does not mean you can stop optimizing. Your rivals are continually upping their game, and that requires more work on your part to maintain your status. If you ignore it, you are giving business away to your competition.

6. Better SEO = more credibility

Being higher in the SERPs does not just lead to more visits. It also makes you look like a key player in your industry. Showing up in the second or later pages leads customers to assume that you are a new business, that you do not have a marketing budget to work with SEO, or that you are not very well known. Being on the second or lower search results pages means virtually no search visibility.

7. SEO is less hands-on than other marketing techniques

While there are other methods of inbound marketing that have similar effectiveness, like social media or email marketing, they are all hands-on methods that require constant attention. With SEO, once you have optimized it, you can basically sit back, relax, and wait for your site to climb in the rankings. If you have structured your SEO around compelling content and specific keywords, you will likely reap the benefits of that hard work without having to update constantly.

Keeping a competitive edge in your market is a multi-pronged approach. Although SEO can be confusing, putting in the time to lay your groundwork pays off in the long run. As I said before, SEO is not going anywhere, so adding it to your marketing roster is a must.

SEO has changed a lot over the past years. Although frustrating at times, with search sites like Google changing their algorithm indiscriminately, the benefits to doing SEO correctly (and ethically) is a clear win in terms of longevity, consistency, and quality of leads over paid traffic. Of course, the best marketing plans utilize both organic and paid traffic, but there is a clear argument for incorporating and relying on SEO in your website marketing regimen.

The Principles of Marketing: Desire

As anyone could tell you after twenty minutes of watching Mad Men, marketing is based on desire: i.e., you want something – be it new shoes, whiter teeth, stronger arms – and a business comes along with a marketing promise to fulfill that desire. Marketing cannot create desire: it can only harness and capitalize on the wishes and dreams already in the public sphere, and focus them on a particular product.

Advertisers used to adhere to these principles by spending a lot of money to run a commercial on television, hoping that they had targeted the correct desires. If they misjudged the market, they were out of luck, and money. SEO takes this idea and reverses it. Instead of needing to go where your market is located, it brings leads directly to you.

SEO: Self-Regulating Lead Generator

Here is the formula expert Daniel Fagella put together to explain SEO:

(B1 + B2 = DP), DP = Your Organic Strategy = $$$
(Belief + Behavior = Decision Patterns), Decision Patterns = Your Organic Strategy = Sales

Belief and behavior are correlated, and together make up the “decision patterns” of your target market. When these decision patterns are congruent with your organic strategy, your SEO brings serious web traffic traction. There are four parts to your organic strategy:

1. High Level: search terms and PPC terms;
2. Top of Funnel: indirect content;
3. Blog Level: relevant blog topics and lead generation tools;
4. Back-end: marketing automation and database marketing.

1. High Level

This is the top level of your SEO plan: determining the specific terms for your particular market and offerings. These are the terms your leads feed into Google that bring them to your page. You can refer to them as PPC, or pay per click, terms.

You find these by using the belief and behavior you think your target market will have. For example, if you are an online marketing consultant in Los Angeles, your list might include terms along the lines of “landing page optimization expert” and “digital marketing agency Los Angeles”.

2. Top of Funnel

This is the area of indirect interest. Using the same scenario, these terms might include “how to increase newsletter open rate” and “compare MailChimp to Hubspot”. Top of funnel terms attract people to your specific offerings, and can be used to create the building blocks of your SEO strategy.

3. Blog Level

This is where you turn visitors into leads. At this level, your prospects are looking for buying information – so you need to craft opt-in assets that will take this to the next level. For example, maybe your visitor found you through a blog post on making better email newsletters; you could then offer a white paper titled, “How to Increase Profits with One Newsletter Template.”

Instead of giving it away for free, require them to trade their contact information in exchange for access to the paper. That is not likely to be a problem, as they have searched for you on Google, clicked through your site, and read your article. They trust you are the expert who wants to help them, and are thoroughly primed to download this paper and become a lead.

4. Back End

Finally, the following up of leads your SEO generates. When you receive a lead, it is important to approach them correctly from the get-go. If they came to you via the above article, wanting to create better newsletters, do not deluge their inbox with sales offers on unrelated topics.

Compartmentalize your leads into the topics they came to you through, and follow up with similar content. Autoresponder sequences can now be set up to offer more information, training, and sales messages specific to the type of offer a lead wants to buy. For each top funnel term, simply set up an “opt-in” offer and an autoresponder sequence written specifically for that term. This is a powerful marketing tool, and can not only generate more profit, but also boost your SEO rankings.

Making SEO work for your company is not the easiest thing in the marketing toolbox, but it will generate more good leads for you over time than any paid traffic. The lessons in this plan can be adapted to almost any industry. Put in the time and effort, and watch your rankings grow!

To run a successful website, you must have content. However, what that should be is not always clear. Making content for content’s sake is a waste of time, a terrible marketing strategy, and will not bring you the SEO results you want.

So how do you actually discover what you need to post? Unfortunately, there is no one-size-fits-all answer. Instead, to create the content that your audience wants you must check the following places:

1. Analyze Search Results

You might think you have an incredible idea for content, but do you know if it has been done before? Is this content people are even searching for? How would they search for it?

This may seem obvious, but to get a better picture of your content needs, you need to take a look at the search engine results pages (SERPs). Begin by looking at keywords, titles, phrases, and content topics; you will quickly get a feeling for your target keywords. You can also get a better feeling for the items that are already out there and what is being asked to get to these results.

When crafting this strategy, do not forget to check if you already have content online that would link to this particular topic. If so, is it strong enough to hold up to a search? If you did not find your link among the results, or do not have content related to these keywords, you will likely need to build something – something that is better than anything else out there.

Remember: just because you have an idea you like does not mean it is an idea your audience will like!

2. Evaluate Current Content

To evaluate content needs, you also need to understand the buyer journey and what information is needed to help customers make a purchase. You should begin by seeing what content on the site is working (and what is not) with analytics.

Funnel Analysis

Google Analytics is one tool that provides the ability to set up conversion funnels, which help you learn how visitors move through the site and where they are dropping off. If a specific page is responsible for the majority of drop-offs, you should take a deeper look to determine what it is on that page that is turning customers off. The opposite scenario is obviously looking at pages doing exceptionally well, and finding out why.

Bounce Rate

Similar to funnel analysis, bounce rates can help you understand how your content is performing. For example, if a product page has an 80 percent bounce rate, there is a reason why. Is it missing information? Is there a broken link? Are you using the wrong keywords? Look at referral sources and keyword targets, along with calls-to-action, cross-links, and headings. When you see how people are getting to the page and what they are expecting to see versus the content that is there, you can start to figure out why they are leaving and how to fix it.

3. Ask Your Customer

The most valuable sources of information about your customers are: your customers! I will not spend much time on these, as I have discussed this topic in depth previously, but utilize the following options to evaluate customer needs.

Customer Surveys

You can use services such as SurveyMonkey to send a survey to everyone on your mailing list, or, through a service like KISSMetrics, target specific pages and set email triggers based on behavior.

Abandonment Emails

Send an email offering to answer questions, encouraging a return to finish the purchase, or a quick survey on what went wrong when someone abandons a cart before buying. Sweeten the deal with a coupon or discount.

Live Chat

Live chat is extremely beneficial! It gives customers immediate support, and can serve you a wealth of information, such as frequently asked questions, missing information, misleading content, and website problems you might not be aware of. Evaluating live chat logs offers great insight into content needs.

Creating successful content is no easy task, but if you take the time to do it right, your content will shine in SEO. By evaluating your current content, analyzing the flow of a buyer’s journey, and asking your customers what is missing, you will have a better understanding of the content you have, and where the gaps you need to fill lie.

A great deal of successful communication hangs mainly on getting the right message in front of the right people at the right time. Although social media has indelibly changed how businesses communicate with their customers, often their attempts to connect on social media fall short. Posts are seen once, and then slide into social media limbo. Unsurprisingly, social media sites are turning their attention to site search functionality to make all kinds of information from the past discoverable.

Increased search abilities present better opportunities for communicators who already incorporate search in their social media strategy – a few risks as well, but those are manageable. Today I will take a look at some techniques you can use to make sure you shine in social media results. Search engine optimization (SEO) can absolutely be a social media tool!

Your Social Media Profile

Start with your profile. Spend some time filling it out, and making the content as rich as possible. The more you are able to include, the greater the amount of information available to match a user’s search. Brands should also use synonyms of their product; for example, Pepsi might want to include soft drink or soda in their profile.

The number one rule: do not forget to link back to your homepage! Always have a link on your profile taking visitors to your official website. The main use of the social media account is not to promote the social media platform, but to get visitors back to your official homepage.

Grow Your Followers: Likes and Shares Count

Pages with a lot of high-quality followers consistently rank better in searches. High-quality followers are fans that follow across various social media channels, with a large percentage interacting with you in some way – such as sharing, pinning, retweeting, and liking.

Growing your followers is a slow process, but effective as long as you are consistent. Present your brand uniquely, update your posts daily, and maintain a consistent voice. Engage with your followers directly, encouraging current followers to return and help build your authority for potential new followers.

Encourage Those External Inbound Links

Social media is great for encouraging more external sites to link to your content. The more diverse external links you have, the more authority you will gain in Google’s eyes. In this case, social media is basically a broadcast channel. Your content, assuming it is original and useful, is going to serve as bait, and your social channels are the fishing poles, dangling the bait in front of the right eyes.

Use hashtags for your initial rounds of syndication, and do not hesitate to bring your pre-existing content into current discussions and threads. Doing so will improve your reputation as an authoritative leader, but more importantly it maximizes your potential external link sources.

Optimize Your Brand Management

As I spoke about in the introduction, this relies on pre-existing content. Improved site search will potentially create problems for companies which may have had a previous social media crisis, as old posts emerge from archives that were previously off-limits. At minimum, continue posting new content that resonates with your fan base, as measured in shares, likes, and positive comments.

You should continually monitor search results for your company name, brand, key executives, and other important information. Search algorithms are more likely to favor newer content, but the exact rules will shift over time. It is better to be safe than sorry!

Finding the Fakes and Checking Your Profiles

Social media can help you in two important ways: finding the fake representatives of your brand, and staying on top of all your social media profiles. Use the search function to find and eradicate fake pages for your company. You can also keep an eye on well-meaning fan pages that might pop up. In the case of the latter, check what rules they are violating, and consider reaching out to them informally before sending a formal cease and desist letter.

While searching for your company in Google, take note – often social media profiles will be linked higher than your web page. Go through all of your profiles, and update pages as necessary. Keep in mind that while one channel might not be your main platform, someone could come to your company through that page. As such, it pays to have all profiles up-to-date and filled with engaging content.

For the most part, these elements all come down to one basic principle: the better experience you give your users, the better you will rank in search results. Understanding the root causes for social media’s effects on SEO can help you better direct and manage your campaigns. The more you optimize your brand for search results, the wider you open the channel for new potential customers to find your brand.

I have talked a lot about keeping your customers happy, and ways to increase customer loyalty. As you are implementing those ideas, your newer customers will happily be on the receiving end of positive business changes. But what about your already loyal customers, who have been with you for so long? This is the perfect time of year to thank them for staying with you. Do not worry – it does not have to break the bank!

1. Buy one (or two), get one free

Giving free items to reward multiple purchases is a great way to encourage repeat buying. Obviously you cannot do this too often – people will wonder why you are giving away your product, and if there is something wrong with it.

2. Offer early access to products or services

Rolling out a new line of products or services? Or perhaps you have a new app or website? Why not invite your loyal customers to give it a try! They are an ideal test market, and can help you fix any issues. This will also give them a sense of ownership over the product, likely to result in bigger sales later on, as well as word-of-mouth recommendations.

3. Offer free shipping

No matter how cheap shipping costs are, free shipping always catches my eye. You could also offer free shipping on 2+ items, which encourages repeat buying. This is a great idea for online stores during the slower months, especially January.

4. Cumulative discounts

Give discounts to customers that add up the more they spend. For example, spend $100, receive 10 percent off their next purchase; spend $200, receive 20 percent off. Offer for a limited time to encourage participation, and make sure to promote this reward on all platforms.

5. Reward introductions or referrals

Loyal customers are your best guerilla marketers. People love to be the first to know about a service, or tell their friends where they found that amazing product. Capitalize on this by offering personalized links: every time someone makes a purchase using their code, give your customer a discount or free gift.

6. Send a thank you note

Customers like to feel valued, and one of the best ways to do this is sending a personalized thank you. I encourage you to send actual letters, but if you would prefer to send an email, make it fun! Mention the milestones your company has accomplished through their direct support, and the goals you are setting for the next year.

6 ½. Remember their birthday

Sending a personalized email on their birthday really shows you care. Including a 5-10 percent discount in that email makes the aging process a little sweeter.

7. Wine ‘em and dine ‘em

Smaller businesses cannot take all of their customers out for a night on the town – but what about throwing an event for them at your place, or a rented space near the office? Supply live music and appetizers, have a wine and cheese night, or maybe host a free yoga class. Clients will be excited to meet the people behind the services – just be sure to limit the RSVP numbers appropriately.

7 ½. Introduce yourself – throw them a party!

Piggybacking onto the above idea, why not invite loyal customers into your shop to see what happens behind the scenes, or important lessons you have learned? If you have a coffee shop, take them through the coffee roasting process; if you have an online shop, maybe host a lecture on how you source your goods, or invite one of the artists in to talk about their work. Get creative – and do not forget to provide a few snacks.

8. Spotlight your customers

Highlight loyal customers in your newsletter or via social media. If you have space, include a small caption with where they live, interests, and their favorite product of yours. Not only is it flattering, your other customers will feel a greater sense of community when you put faces and stories to their peers.

9. Give some swag

Free t-shirts are the best! Design good-looking t-shirts, tote bags, or even coozies, and your customers will clamor for more. The sky is the limit in terms of what items you can personalize. Think outside the box!

10. Create a loyalty rewards program

I saved the best, and most obvious, for last. Inviting your most loyal customers into a VIP program makes them feel special. Everyone loves the red carpet treatment, which is why these programs are so popular. Your rewards program does not have to be complex: it could be as simple as offering an annual discount on their anniversary.

Consider these statistics: The average business loses 50 percent of its customers every five years. A 2 percent increase in customer retention has the same effect as decreasing costs by 10 percent. Acquiring new customers can cost as much as five times more than satisfying and retaining current customers.

Obviously, keeping an existing customer is far easier than attracting a new customer. Loyal readers of this blog know that that idea has become my mantra these past few weeks. Unfortunately, as consultant Noah Fleming notes, that insight still gets forgotten as businesses go after the far-sexier acquisition of new customers.

In his book, Evergreen: Cultivate the Enduring Customer Loyalty that Keeps Your Business Thriving, Fleming explains how you can create customer loyalty, and how that helps your business. To retain customers successfully, he argues that businesses should follow a set of core principles he calls the “Three Cs of Evergreen Organizations”:

  • Content
  • Character
  • Community

Create Your Content

Businesses realize that without a great product, they will fail – and so spend 99.9 percent of attention on their “content”, Fleming’s term for their core offering, service, or product. Unfortunately, in today’s competitive market, that is not enough. “Just having a fabulous product is no longer enough to guarantee long-term success,” he writes. You must offer more by creating a genuine, lasting relationship with your customers, and enabling them to connect with one another.

Create Your Company’s Character

Customer’s today take more than price into consideration when choosing to do business with you: they want to know your company’s character. “It’s analogous to a person. It’s your brand personality, and who customer’s think you are,” explains Fleming. You cannot treat customers like a transaction – they give you money, you give them a product or service. Instead, develop a story explaining your brand’s founding principles and values that draws in your customer’s interest. Make it memorable and meaningful, and then conduct business in a manner consistent with your story, as well as how you want to be perceived by your ideal customer.

Create Your Community

The best companies in the world are creating communities out of their fan bases. “Humans desire and crave connection,” says Fleming. He points out that companies who recognize this desire, and create structures allowing communities to form “will have a significant competitive advantage in the future.” These communities cement loyalty because they allow fans to built a relationship with not just the company, but also with each other.

To help you implement the above principles, use the following four values as guidelines for company-changes:

Perspective

In your marketing initiatives, rather than a “here is what we offer” tone, put yourself in your customer’s shoes. What would they want to hear? What are the benefits of doing business with you? For which problem is your business or product the perfect fix?

Not sure what they need? Ask. Regardless of the medium, a survey is a powerful tool. You will often get more detailed answers than anticipated, which saves you the cost of market research. Focus groups can lead to even greater insight into your customer base.

Empathy

When a customer comes to you with a complaint or problem, you have the chance to show them you care. Handling customer service issues with empathy and backing it up with action proves your company values its clients. Customers are more likely to stay with you after a positive customer service experience – and extremely likely to leave after a negative one. Especially in today’s world of social media, it is best to side with your customer: one dissatisfied client can do a lot of damage.

Flexibility

Giving your employees flexibility in decision making allows them to feel empowered to deliver whatever solutions necessary to built trust and loyalty with your customers. Finding the quickest and most effective solution demonstrates you are the kind of company willing to put the customer first. A customer who feels taken care of is more likely to assist you in solving the problem and identifying how to prevent the problem in the future.

Personalization

Personalization is the way of the future. Customers are both demanding, and expecting, custom experiences. Allowing your customers choices demonstrates that you care about them. The choices do not have to be huge: simply giving them the option of how to pay, adding an online chat function to your website, or making sure the customer service phone line reaches a live person instead of a recording are all easy, but valuable, options.

While there is a lot to keep in mind when creating programs to build customer loyalty, following the guiding principles and set of values I outlined guarantees your success. Continue to put the customer first, and recognize their importance in the future of your business. Making a company that would win your loyalty is the first step in keeping your customers loyal forever!

Although I have talked a lot about customer loyalty and its benefits, some of you still are not sure how to build customer loyalty. This is a topic worth going more into depth on, so I have answered the below FAQs to answer any other questions that might arise. If you have additional questions, ask them in the comments!

Why should I focus on customer loyalty? I can always get more customers.

You can get more customers, but that is going to cost a lot more that selling to existing customers. Numerous studies have shown that loyal customers buy more, more regularly. The lifetime value of a customer is a greater return on investment (ROI) than continually paying in marketing fees to acquire new customers – many of whom will not return for a second purchase unless you build customer loyalty!

I thought my store had good customer loyalty, but now I am not sure. Can I measure it?

If you notice you are losing customers, the first thing to find out is why (surveys are great for this!). The majority of customers leave because they are dissatisfied with the customer service aspect. Only a few leave because the dislike the product. People want to feel like valued individuals, so train your customer-facing employees – anyone on social media, the phones, or face-to-face – that all customers are important to the business and their job security. When employees treat customers in a friendly and efficient way, it is in their interest, as well as more fulfilling – so everybody wins!

Measuring loyalty mainly consists of tracking purchases over a set period of time, to see how often a customer buys from you. You can also distribute personalized codes, so you know when a new customer has found you as a recommendation from an existing one.

What are the most effective ways I can improve customer loyalty?

Easy: improve your relationship with the customer, via better service. It is unlikely you will be able to offer different products or services than your competitors, so build a rapport by offering better customer service than anyone else. Figure out the 2 or 3 most important service components to your business – turnaround? Efficiency? Adaptation to customer needs? – and focus on improving them.

The other most effective way to improve is training staff that customer retention is the main goal of the business. Teach them to ask customers for ideas for improvement, to welcome customers without overwhelming, and to understand the products they are selling before they face a customer. All company promises should be kept, and if they cannot, be honest as soon as possible with the customer. Be honest in all dealings with consumers.

Tell me more about my customer-facing employees. What key skills should they have?

Number one, they should remember that when they are talking to clients, they ARE the company! They need to keep in mind that anything they say or do creates a good or bad impression on the customer.

Secondly, employees should be knowledgeable and competent in their fields. Customers want answers on the spot, so you should empower them to answer questions with authority. This reassures the customer in your company competency.

Lastly, communication is key: make sure employees have good grammar and spelling. Mistakes in emails or on the phone leaves a bad impression, and ruin credibility.

Help! How do I deal with customer complaints?

When the customer contacts your company, the first thing to do is apologize! Employees should diffuse the situation with sympathy, listen to the facts, agree on what to do, and act. Most importantly, ensure you have a clear company policy in place. This makes it easier for employees to react appropriately.

Use complaints as an improvement tool. Every complaint is a customer telling you what you could do better to increase their loyalty; ask questions so you can be clear about the exact issue. Ask for additional feedback as well, to see if there are any other improvements that can be made.

When a problem arises, act quickly – especially on social media and other public review sites. People are watching to see what you do and how you handle it, and your response is an opportunity to demonstrate your commitment to customer service.

Is there a way to monitor my customer service?

Absolutely! First, make sure you are providing the appropriate service. Check in with customers after they contact you for feedback. Ask if you provide the same level of service as similar businesses, and what areas of service are most important.

Once you know this, monitoring is relatively simple. Measure how fast orders are dealt with, make spot checks on customer transactions, check the punctuality of deliveries, and measure complaint levels. If you see a downward trend, use your customer complaints to help fix it.

In the increasingly competitive world of business, customer loyalty and customer retention are inextricably linked. It is true that both are valuable aspects of business retention, but oftentimes the concepts are misunderstood. I would like to take the opportunity today to clear up the confusion, and explain the differences between the two. Trust me, you are going to need both to grow a successful business!

Customer retention is preventing decline

Retention is about keeping your customers yours, and making sure they do not leave. Retention efforts are short-term and reactive; they often respond to changes that threaten to shrink your customer base, such as a competitor executing a successful ad campaign or a sharp price cut. Retention campaigns are aimed at preventing the exodus of your at-risk customers to said competitor, and may include locking them into a more flexible or generous contract just to make sure they remain your customers. Retention is a separate phase of the customer journey that comes after customer acquisition and development, but precedes customer win-back.

Keep in mind that a retained customer is not per se a brand enthusiast; they might stay with a brand due to switching barriers, ignorance, or sticky habits. Just because you have kept a customer does not mean you have a brand advocate.

Customer loyalty is about growth

The term ‘loyalty’ in this discussion covers both customer loyalty and loyalty programs, both of which translate into marketing efforts designed to turn positive customer interactions with the company into positive outcomes for the customer. With these programs, you effectively create a “scratch my back, I’ll scratch yours” mentality that creates an emotional tie between you and the customer. You are ensuring that your customers will come back to you when they have to choose between you and your competitors. Loyalty has a broader reach and involves other lifecycle components – customer development, retention, and win-back.

Loyalty initiatives are more proactive than retention, and aim to build long-term ties with your customer base. Loyal customers are more difficult to win from their brand of choice, unlike retained customers, and also act more often as a brand advocate by word of mouth.

Both are important for your business

Retention and Loyalty are two different types of marketing campaigns, and companies should have both campaigns working in tandem as part of the on-going customer conversations. As covered, the two concepts clearly have different roles in the customer journey or lifecycle. Retention is a part of loyalty, and should not be confused as being the same thing! Intermingling of the two concepts can lead to trouble with your ROI.

Conclusion

In short, while retention is mean to prevent a customer ‘break up’ with a brand, loyalty instead strengthens the relationship so breaking up is never considered. When developing a marketing strategy to keep and develop existing customers in today’s turbulent market environment, make sure to further refine your objective: do you aim to lock your customers in a marriage of convenience, or do you strive for a true and lasting bond? Better make a clear strategic choice in advance, because omitting to do so will yield unmet expectations and squandered budgets.

Customer retention is a major factor in making your company profitable. As we have discussed in previous blogs, retaining just 5 percent of customers could increase your profits by up to 95 percent. Therefore, you should check in with your business numbers, and ask yourself regularly: has the client retention rate of my business recently increased, decreased, or stayed the same? If your answer is either of the latter two, drafting a customer retention strategy can help achieve an upward trend in these figures. Today I will show you how to create your own strategy based on just four steps.

#1 Research What Your Customers Need

You cannot give your customers what they want if you do not know them! Analyze your marketing performance data, and make decisions based on your results. A study by Hubspot shows that companies that base marketing and sales decisions on data of their customers improve their return on investment (ROI) between 15 and 20 percent. Understanding what your customers need keeps them as customers. You should analyze the following subjects:

  • Customer service: poor service is the main reason 82 percent of consumers does not return to a business after their initial purchase. Make sure your customers are happy, or find out what they would like to see improved.
  • User experience: if the shopping experience in your online store is not smooth, why would clients return?
  • Clicks/open rates during the email onboarding: what converts first time buyers into second time buyers, and eventually loyal customers? What falls flat?

#2 Use Feedback from Existing Customers

Without collecting feedback, any changes in your customer retention policies would be primarily based on guesswork – and the chance of them magically producing the desired result is infinitesimally small. Listening to customer feedback can provide a substantial boost to your customer relationships. By collecting the experiences of your customers, you can find out the main sources of satisfaction or frustration. Open-ended survey questions are great ways to source from your clients specific issues and hang ups in the user experience you might not hear about otherwise. Also, improvements to products and processes that you make on the basis of feedback will connect much better to the needs of your customers.

#3 Set Up an Effective Loyalty Program

Along with improving your products and services to increase customer retention, you might also consider introducing a customer loyalty program. When done well, these effectively turn a passer-by into a brand advocate. Many businesses find the benefits include increased customer spending, the ability to upsell or cross-sell, and higher customer lifetime value (CLV). If you are looking to start a loyalty program, make sure it is worth it monetarily. Then, target your most frequent buyers first; after listening to their feedback and developing based on what they say, you can then begin to roll it out to other customers.

An effective loyalty program ensures your existing customers feel special when they are invited, so that they will be more inclined to remain loyal to your brand. The way you create this perk is therefore as important as the reward itself. Note: in my next post, I will explain more about the issues important for building customer loyalty.

#4 Make It Personal

Appealing to your customers’ emotions and giving them the feeling they really matter goes a long way. Research shows that the vast majority of consumer decisions are based on emotion, and even little things can make a difference. For example, 60 percent of all customers have at one time stopped dealing with a company based on their interactions with indifferent salespeople. Therefore, you need to focus your customer communications not around “any other customer”, but instead how your customer would like to be viewed: in a special class, all their own. Shape your communication in a personal way, so that each customer feels that he or she is not just a customer.

This level of emotional design brings your customers closer and helps build a sense of community, belonging, and attachment to your brand. It makes it easier and ultimately more pleasurable to buy from you than from another store with similar offers, but no emotional attachment.

In conclusion, although the formulation of an effective customer retention strategy requires effort, it will produce a lot of time and money in the long run for your business. When in doubt, remember the wealth of information available from current customers. I guarantee that keeping a longtime loyal customer happy is far more worthwhile than acquiring one – so get ready, get set, retain!

Customer retention has traditionally never ranked high as a business priority. Acquisitions have always held more weight, and getting new customers was seen as prime importance. Even in 2012, marketing experts ranked cultivating customer loyalty and engaging customers lowest, while continuing to throw their marketing budgets into acquiring new customers.

However, as I discussed last week, Retention Marketing efforts are slowly gaining more traction as businesses begin to learn how valuable current customers can be to profit margins. According to a study by Bain & Company, increasing customer retention rates by just 5 percent increases profits by 25 to 95 percent. Additionally, 82 percent of companies agree that retaining customers is cheaper than acquiring new ones. How are companies’ attitudes changing?

Return on Investment

Traditionally, customer value is based on a simple formula: return on investment (ROI). This is calculated by amount spent marketing versus how many customers make a purchase – a quick and easily figured sum. Most companies prefer this simple formula to measure results, as it is a fast and visible amount. However, what people seem to forget is ROI implies the concept of time, because “return” happens over time. Without looking at time, you cannot calculate the “real ROI” of a campaign.

In contrast, customer retention takes into account the potential value of a customer over the longer period of time, by looking at their spending habits and behavior. Using this data increases the accuracy of calculations regarding campaign effectiveness.

Losing the Profit Margin

Marketing campaigns are built around driving the ROI at any cost, often by adding discounts and other tactics that eat away at profit margins. Yet not only is this bad for your bottom line, there is proof discounts alone do not drive sales. This year’s Black Friday posted lackluster sale numbers, even though doors opened earlier and discounts were deeper. The National Retail Foundation reported an estimated 11% slide in profits, despite an increase in online sales. Discounts may increase the number of purchases, but the average order value drops.

The Shift from Price to Value

As competitive pricing reaches its zenith, consumer focus has changed from price to value. The difference is crucial: the value is formed not only by price, but also by the perceived value of the entire shopping experience. 66 percent of customers would rather spend an average of 13 percent more to buy from a company that provides excellent service, than to find the lowest price available.

This is huge! It means customers are willing to invest in companies that care about their audience. To provide value, you have to invest in your customers – beginning with changing how you perceive customer value.

Customer Lifetime Value

In acquisition mode, a business gives value to the customer based on the price of their first transaction. In other words, a customer is worth only as much as they bought, as a one-off profit. In contrast, customer retention measures the lifetime value (CLV) of each individual, or the potential net profit from an individual throughout the course of their interactions with the company. Just as customers have begun to choose value over price, companies must learn to choose at CLV over one-time transactional value. The loyalty of existing customers is higher than that of newly acquired customers. Generally, each additional year a customer stays with you brings both an increase in orders per year, as well as in average order size.

Execute A “Hard Reset”

In order to capitalize on the new research into CLV, a company must execute a hard reset on how they define business profitability. Retention Marketing must be equal to, if not more important than, acquisition efforts. At least 50 percent of the total marketing budget should be earmarked for retention, and it should be a CEO-level and company-wide goal. Instead of adding to current staff responsibilities, a separate Retention Marketing position should be created.

Finally, the results of acquisition and retention efforts must be considered proportionate. Performance reviews and campaign results must be restructured to take long term effectiveness and CLV into account, so acquisition numbers are not given priority.

This all means a company-wide reorganization effort, which is a drastic but necessary measure. If acquisition is a short-term sale that ends when a customer finalizes their purchase, retention is a long-term investment in your company, and your profits. Businesses who invest in customer retention practices find it pays handsomely in the end.

The time is right for customer retention. Are you willing to invest?