Why is customer retention so important? Because every single click on your ad costs you money. See these customer retention strategies that can maximize your profits.
Why do we need a “good” customer retention strategy?
I have been running a couple of online businesses for quite some time now. And, in my experience, it usually costs around $16-$18 for me to find a successful lead from online advertising. The average cost per lead for my niche is around $19. So, I think that I am doing well. But, still, $19 per sale is a significant cost for me.
Even though I don’t like to pay $19 per sale, paid advertisements are the most viable lead generation method for me. And, I think more or less this might be your story too.
So, the solution for all these endless advertising costs is having your existing customers to make more purchases.
But, how can we do that?
How to retain your existing customers?
- The best way to retain customers – Provide a personalized service for your customer.
- Leverage the power of referral programs.
- Introduce a subscription service.
- Build a loyalty program.
- Design a convenient shopping experience.
- Create a strong brand identity.
- Start an email marketing campaign.
1. Provide a personalized service to retain your customers
This is undoubtedly the best customer retention strategy, and I can guarantee you that.
You can do a few things to provide personalized service for your customers.
- Add a human touch to your business by engaging through social media.
- Send personalized thank you notes.
- Personally apologize for any mistakes.
- Send gifts.
Use social media for customer retention
If you are not using social media to retain your customers in your business, you are literally going to lose this game. Social media is a great marketing tool. And, you must start using that to it’s fullest extent.
You can start by simply replying to your customers on Twitter and Facebook.
Say thank you, and retain your customers
Also, you can tag your customers on social media and thank them for making purchases. This will help you to retain your existing customer, and this will also help you to reach the other people in your customer’s own networks.
Apart from saying thank you on social media, you can also post a custom printed thank you card. People rarely get a card through the post these days. So, this thank you card will definitely surprise and delight your customers. And, most probably they will take a photo and upload that on social media too. Guess who is going to get some free advertising on the side?
Handwritten cards are the best. But, if you can’t find the time, you can use services like postable to send a printed card. Google for similar services where they print, stamp and post all your cards for you.
Say sorry to have them back
Mistakes can happen anytime. Of course, you must try to avoid any mistakes. But, if something went wrong, keep your ego aside and honestly say sorry. Also, do your best to make it up to your customers.
Saying sorry has two benefits.
- It will save your business from getting a bad review.
- Since the customer knows that you are taking responsibility, they will not hesitate to make another purchase.
When you say sorry, don’t be a tin man. Message them, call them or email them with your personal credentials.
2. Leverage the power of referral programs to retain your customers
“For every friend you refer, you will get $10, and they will get 10% discount” -This sentence can do wonders.
And, yes, it is profitable than spending $19 per lead. For example, if you sell a $40 product, $10+10% of $40 is $14. This means you can save $5 per sale. And, most probably that $10 will end up in another sale too. On the other hand, even if the other guy didn’t make a purchase, still you get your existing customer as a sales contact.
By providing a referral program, you are making “kind of” partners for your business. It is a win-win situation for both you and your customers. So, they are more likely to stay in touch with your business.
3. Introduce a subscription service – get repeat orders every month
If you are selling consumable items, like pet supplies, make-up, coffee, supplements, etc., you can retain your customers by introducing a subscription service.
How can you increase customer retention using a subscription box service? Once subscribed, your customers are committed to repurchase from you. Also, since you have a “sort of” guarantee for your sales, you can take bold decisions to introduce more perks to delight your customers.
Also, keep in mind that your subscribed customers can unsubscribe anytime. But, if you keep delighting them with fantastic service, they will be more than happy to keep the subscription. On the other hand, once subscribed, we rarely put an effort to unsubscribe. Think of those paid GYM memberships you have, without even using.
4. Increase customer retention with a loyalty program
Recently I came across with some data from iVend retail. And, it stated that 58.7% of internet users worldwide mentioned earning rewards or loyalty points as one of the best aspects of the retail shopping experience.
Creating a loyalty program is a win-win strategy for both you and your customers. Your customers will get more benefits as they stay loyal to your business, and you enjoy more profits due to repeat sales.
When you start, create a loyalty program that gives away free points for just signing up. This will encourage your customers to sign up with your program. You can let them earn rewards from repeat purchases, or after a set dollar figure.
Also, depending on the retail platform that you are using, there are some plugins and apps to create automated rewards for your customers. When your customers see how easy to get rewarded from your loyalty program, they will stick around your business and help you to grow for sure.
5. Design a convenient shopping experience
As we have discussed in two things that matter most in e-commerce, speed-and-convenience in your customer’s shopping experience is one of the most effective ways to increase your customer retention.
We live in a world that moves really fast. Even a 1-second delay in your page load time can kill your business. So, as a seller, if you want to retain your customers, you should be really focusing on increasing the speed and convenience of your shopping experience right now.
Here is a list of the things that you must work on to create a better shopping experience, and to retain your customers.
- Don’t use irrelevant landing pages – Do not try to fool your customers by sending them around your website.
- Don’t use annoying pop-up ads – Usually, more than 80% of your website visitors will be on mobile. So, if you have annoying pop-ups that cover your content, they will close your page.
- Don’t create a complicated checkout process – Give options. In some cases, buy now or buy as a guest would work fine.
- Create simple product descriptions – Depending on the product you sell, your customer might not worry about specific details and information.
Additional reading: 5 common mistakes in product description writing
6. Create a strong brand identity to retain your customers
Strong brand identity will help your customers to remember your brand. How many times have we forgotten some great websites when we want to pay it another visit? So, make sure to design your business’s brand identity to make you set apart from your competitors.
Designing your business’s brand identity is a process, and you can’t do that over the weekend. So, make sure to invest enough time to work on your business’s brand identity. This will not only help you to retain your existing customers but also it will provide a strong first impression for your new customers too.
7. Start an email marketing campaign, bring back your customers
Last but not least, email marketing is the tool that you must have in your marketing toolbox. Email marketing is the cheapest way to find repeat customers.
According to Shopify’s Black Friday and Cyber Monday data, emails had the highest conversion rate of 4.29%, where the social referrals had only a conversion rate of 1.81%. Isn’t that a fantastic way to increase customer retention?
Creating a good email marketing is easier than you think
Having a good email marketing campaign is easier than you think. If you are a small business (like, if you have a less than 2000 email contacts) you can even use MailChimp’s free plan. I am using that too. By the way, why don’t you give a few seconds and subscribe to my email list? I promise to send great articles like this to your inbox.
When you are in business, you can start by sending a follow-up email to your customers. After a week or two of making a sale, send your customers an email thanking them for their purchase and asking for any further assistance.
This gives a personal touch for your sales, and your customers will love that. Also, you can subtly include a cross-selling strategy with this email. Suggest some complementary products to the original purchase and increase your chances of getting a repeat customer.
Ask for a review in your email
At the end of this email, ask for a review for their purchase and purchase experience. If they agree, this will give your business a great social proof, which can increase your chances of creating a better authority in your niche.
Getting a public review is like having a micro influencer marketing program. People usually trust endorsements from their family and friends. So, this will give you a great chance to expand your business, while retaining your existing customers.
When you should start focusing on customer retention
Customer retention is a growth hack for your business. So, you have to work on customer retention strategies right from the beginning. But, first, you need the customers to retain. So, if you are a new business, your priority should be customer acquisition strategies.
There are five stages of any business. And depending on where you are right now, think how much weight should be added to your customer retention strategies.
- The start – As soon as you start a business, you won’t be getting any sales at all. So, now you have to focus 100% on the customer acquisition strategies.
- Rising star – After some time, you will start getting a few sales per week. Now, this is the time to add more weight to your customer retention strategies. Now, around 15% of your efforts should be on customer retention strategies.
- They know you – When you start getting at least one sale per day, it is time for you to double your efforts on customer retention strategies. Make it 30%, and still keep 70% of your focus on customer acquisition.
- Getting the wings – If you can make more than 5 sales per day, it is time for you to balance your efforts on retaining the existing customers and acquiring the new customers. Make it 50-50.
- Flying high – If you are making more than 10 sales per day, hearty congratulations! Now, you can keep focusing more on your customer retention strategies. Make it more than 60%. Your repeat customers will have your back.
Customer retention – The ultimate growth hack for your business
Customer retention helps you to get more value from your existing customers. This can lower the overall cost per lead in your business.
Once you spend so much money to acquire a new customer, you can work on these few simple customer retention strategies to keep them around your business for a long time. This will help you to maximize your revenue for each lead you get.