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Customer Retention Marketing

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Happy New Year! Unfortunately, after the champagne is drunk, retailers realize that January is a harsh month. People have spent a load of money on Christmas gifts, and are not eager to spend additionally in the new year. Acquiring new customers during this month is hard and expensive, so you, web store owners, must think creatively. The answer?

Customer retention. Studies show retaining customers is far more cost effective than spending to acquire new ones – luckily for you, as most of your budget has probably gone to Christmas marketing. Let me sketch it out for you:

Imagine two online stores. One retains 90 percent of its customers each year, and the other 80 percent. Now imagine that they both add new customers at the rate of 20 percent per year; this results in no growth for Store B, but 10 percent net growth for A. If growth rates remain steady, in seven years, store A will virtually double in customer size, while store B will remain plateaued. All else being equal, simply retaining that extra 10 percent puts store A on a path to grow immensely without changing anything else.

Clearly the advantages compound over time, and often in unexpected ways. The smallest of changes in customer retention can create huge changes felt throughout the business, that multiply over time. Do not underestimate the effect retention has on long-term growth and profits.

Reasons to step up your retention marketing:

  • Prevention of client loss: businesses average 20 percent loss by simply failing to attend to customer relations.
  • Cheaper alternative than acquiring new customers.
  • Long term ROI.

Interested? Here are a few ideas to keep customers coming back this January:

#1 Exceed expectations

Figure out what the limit of your customer service is, and make a guarantee that you will always exceed. For example, you might guarantee a response within 36 hours, but in reality the timing is more like 12-24 hours. Always keep this level of service – customers will remember the one time they are disappointed, and cite that as reason to walk away.

#2 Sell and then sell again

So many people do a great job of creating the initial sale, and then drop interest in the consumer immediately – sometimes as soon as money is passed over. In reality, the sale has only just begun once someone has made an initial purchase decision. To avoid buyer’s remorse, you have to allay consumer’s fears as well as remind them they have made the right decision. Demonstrate by your actions that they chose correctly, putting them in a place for you to sell to again and again.

#3 Courtesy system

Treating your colleagues pleasantly and politely can build a business. Treat workmates with respect, and speak to them as you would a customer. This creates an atmosphere that nurtures and retains trained workers, but also creates workers who treat your customers as they have been treated – and retains them as well.

#4 Bring back the “lost sheep”

There is no point in sending mass emails to attract new customers when 25-60 percent of your dormant customers would respond to a message written in the right way, specifically tuned to them. Remind them of your business, find out why they are no longer customers, and overcome their fears by demonstrating how much you still value them. This will result in satisfied, loyal customers.

#5 A complaint is a gift

96 percent of customers do not complain, but simply walk away. While they might be too shy or uninterested to tell you why, they will certainly tell their friends. A system for unearthing complaints is the lifeblood for your company. Changing processes, like return policies or checkout methods, in reaction to customer complaints is the surest way to hook lifelong customers.

#6 Utilize surprise reciprocity

Studies show reciprocity is even more powerful when it comes out of nowhere. Give your customers a surprise bonus or gift certificate, without even making a purchase. The fact that it came out of nowhere will leave a greater impression on them.

#7 Choose your words carefully

Not all words are created equal. Certain persuasive words encourage customers to buy more; in particular, free, new, and instantly. Customers who hear these will enjoy their purchases more than they would otherwise.

While I have only gone in depth on the seven strategies above, additional options include:

  • Blogs
  • Loyalty Programs
  • Personal Touches
  • Questionnaires and Surveys
  • Social Media and Social Proof
  • Labeled Customers
  • Product or Service Integrity

As you can see, there are tons of options available for your business. The biggest outcome from all customer retention work is that you get to know your clients even more over time – which makes it even easier to create custom emails specifically tuned to your audience. Good luck and have a great start to 2016!

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