First-time business owners tend to blindly focus on growing the company by getting more customers in order to generate more revenue, to then hire more employees and start the process all over again. They approach this with an “any means necessary” attitude that results in growth, but not healthy or sustainable growth. A commonly overlooked aspect of growth is simply maintaining the customers already working with you while persuading them to purchase more and share their pleasant experiences with their friends and family. Putting client retention strategies into place at the very start makes your business more stable and helps you grow with greater security for years to come.
The Importance of Customer Retention
Endless advantages accompany retaining customers. First, you improve revenue prospects over the long run. Client retention strategies often focus on reducing churn, or the loss of buying customers, which keeps your client base solid and guarantees a certain amount of monthly income. These loyal, return customers tend to spend more per order on the whole and offer significant lifetime value to your business.
The next biggest advantage is a massive increase in profitability since you stabilize and generate more revenue in the long-term. Concentrating on retention helps to keep your fixed costs in check. Acquiring new customers requires a sales team to hunt them down and sign them up. For many small businesses, setting up a large sales force at the beginning just would not be feasible with the amount of money required to hire a significant number of employees. Plus, why build a large team when customers do not want to continually buy your product or use our services? Customer retention helps your business grow without spending a lot of money.
Loyal customers also share their satisfaction with others. Simply providing quality products or services and excellent customer care will impress your customers and make them spread the word about your great business. This adds to your customer acquisition rates without costing you any money. It is also easier to up-sell brand new or supplementary products and services to loyal customers already purchasing from you on a regular basis.
11 Turn-Key Client Retention Strategies from Pathwwwway
- Guarantee the Quality of Your Products and Services
No one repeatedly buys from a business when they are continually dissatisfied with the products or services offered. Guarantee the quality of your products or services by regularly conducting product tests and customer satisfaction surveys. If you discover issues, own up to them and right them as soon as possible. Even with mistakes, being honest and forthright increases your credibility with consumers.
- Encourage Complaint Reporting
Once you learn about any issues, do not hesitate to fix the core problems immediately. You will not learn about the issues without customers reporting their concerns and complaints. It is important to cultivate a safe space for open dialogue between your management team and your customers. Listening and actually hearing your clients is one of the best client retention strategies Pathwwway can recommend.
- Add a Customer Relationship Management System
A customer relationship management (CRM) system can help with that direct line of communication. In a CRM system, your management team can track, monitor, and speak with customers using a virtual platform. Customers can input complaints into a special section that allows the problems to be addressed right away.
- Budget Time and Money for Retention Marketing vs. Acquisition
Instead of focusing all your monetary and physical resources into acquisitions, shift a large chunk into your client retention strategies. Mass advertising, general advertisements, and cold-calling work sometimes, but not without a lot of expense, labor, and backup funds to keep you afloat in the meantime.
- Consider Digital Marketing
Do not pour your precious profits into hiring tons of sales people at the very beginning. Invest in digital marketing instead since it is easier to publish, unpublish, or delete online marketing efforts than to hire, train, or fire new employees.
- Understand Customer Value
Many businesses focus on individual sales alone when they would benefit from tracking, measuring, and monitor each customer’s value, especially over a lifetime. Collect data on how the number of purchases made by every customer, how often they buy, and the value of the purchases themselves. You will notice the more you invest into client retention strategies for these customers, the higher their value over time.
- Pay Attention to Customer Service
Customer service is, by far, the easiest of the client retention strategies to start since you should already be concentrating serious effort into providing the best experience for your customers anyway. Give your management team and customer reps the power to resolve problems themselves without needing to clear it higher up the food chain. Service that goes above and beyond earns you the most long-term, loyal clients.
- Communicate Frequently
Shooting a quick email or mailing an attractive postcard can go a long way to maintain a customer relationship without breaking the bank. Send them a reminder about upcoming sales events, or even a quick “thank you” message with a discount offer to show them how much you appreciate their loyalty.
- Use Social Media to Interact
Use social media in a similar matter to keep your clients up-to-date about potential deals or new products. You can also give shout-outs to your most dedicated customers. Communication and engagement are vital client retention strategies in this modern, technological world. Try consolidate your endeavors to one or two social media sites instead of spreading yourself too thin over all of them.
- Implement Loyalty or Frequent Shopper Programs
A simple punch card can be the beginning of your frequent shopper program. Customers are familiar with the concept already and the chance to earn free or discounted products incentivizes them to return more frequently. Loyalty programs work the same way, but on a larger scale.
- Host an Event
Both offline and online businesses can benefit from holding special events for their customers, like giveaways, open office hours, exclusive sales, or by hosting podcasts. Businesses with a physical address can host open houses, special parties, new product unveilings, guest lectures, and many others.