Online marketing and Search Engine Optimization are extremely volatile beasts; constantly evolving industries that can twist and turn unexpectedly, ensuring that complete mastery is always just out of reach. Because of that it seems that most of us in the industry focus our attention purely towards that first contact with a potential customer – drawing them into our funnel with a variety of complex techniques. If you're a regular reader of Search Engine People, then you'll already have read plenty of amazing articles about how to attract attention, gain followers, rise in the search results and acquire customers. Today, however, I'd like to focus on what happens after you've acquired a customer. If you work in a large company, then it's highly likely that you'll have a team working on this area, however, for those of you that run your own businesses or would like to know more about this side of the equation, read on…
Why Is Customer Retention Important?
The success of a business in the long-term often depends on a handful of obscure acronyms; ROI, P&L, TCO. When it comes to customer retention, it's all about CLV – Customer Lifetime Value. Sure, some businesses may be after quick wins, satisfying themselves with one-time customers that bring in money quickly and disappear into the ether, but that isn't a long-term strategy – with a 100% churn rate soon enough you'll run out of customers.
A couple of simple statistics should tell you all you need to know about why a solid customer retention strategy is critical: it can cost up to 6 times as much to acquire a new customer than it is to keep an existing one, yet companies typically spend much more on acquisition than they do on retention. The average business also loses about 20% of its customers annually by neglecting to pay attention to customer retention. When a company is just starting out, obviously customer acquisition is the priority, but for established companies there's no question that retention is an absolute necessity.
The Good News!
The exciting thing about the above information is that there has never been an easier time to provide fantastic after-sales service, improve customer engagement and increase customer retention rates. From on-site chatting platforms, to community forums and social-networking sites that enable direct-to-customer communication, there are a lot of options for businesses that want to take their customer retention to the next level.
It's also important to remember that improving your customer retention can actually be an intelligent customer acquisition strategy: by providing top-notch customer service and additional value, you can be sure that a percentage of your customers will convince their own networks to try your products or services.
How To Improve Your Customer Retention Rates
1.) R.e.s.p.e.c.t. One of the simplest yet effective ways to increase your retention rates is to treat each customer with respect! The 'one and done' businesses mentioned above do the exact opposite – they put on the hard word until they've gotten what they want, and they then ignore any attempts at following up, reducing post-purchase dissonance or providing quality customer service. If you want your customers to stick around, show them that you value their business with a follow-up email thanking them for their purchase.
2.) Go above and beyond. Zappos, widely regarded as providing the best mainstream customer service in the world, always takes an extra step to make sure that each experience is a memorable one. When customers expect their orders to arrive in 7 days, Zappos goes the extra mile to make sure they arrive in (for example) 5 days. By exceeding expectations, your customers will be pleasantly surprised and feel a deeper connection to your company.
3.) Get engaged! Utilize the wide range of free channels to share value with your customers and provide them with a human face. Most large companies come across as faceless behemoths, but you have the ability to talk to your customers on a one-on-one level with platforms like Facebook and Twitter. Sure, these are great channels for sharing content, but they can also be used to address customer concerns directly, provide additional information and offer 'insider' specials.
4.) Measure! To increase your customer retention rates, you have to know when, where and why they fall away in the first place. Use all of the data that you have available to discern your weak points. Is there one product or service that has a higher rate of attrition? Is there a post-sale email that is performing particularly well? Make use of all the information you can to improve your understanding.
5.) Reactivate. Sometimes a customer leaves a business, or stops purchasing, without a particularly strong reason for doing so. If you have the permission, reach out to them and invite them back into the fold. They may have sampled a competitor's offering, or they may simply have forgotten that you even exist (it does happen!). Take this opportunity to retell your story and share the value you can offer them – you'll be surprised at how many start coming back.
6.) Turn it around. Sometimes things don't go right – the product doesn't work as hoped, or the service doesn't completely satisfy the customer's initial needs. Don't sulk – use this situation as an opportunity to amaze a disappointed customer with amazing service. Explain ways that the situation can be resolved, walk them through potential solutions – you have the chance to turn a negative situation into a win-win, and that's the kind of thing that shows up in the bottom line!
7.) Reward loyalty. When one-timers turn into repeat customers, they're showing you that they value your offerings and trust your brand. Return this display of affection by rewarding your long-term customers. Surprise them with a gift or even just a personalized message that recognizes their loyalty. Even little touches like this mean a lot to a customer, and confirms that they've made the right decision in sticking with your company – make sure to thank them!
By adding a solid customer retention program to your offering, you strengthen your company and increase the value of your marketing and SEO efforts. By increasing CLV, the cost per acquisition of those strategies becomes much more attractive, so it's a win-win. Also, by increasing your knowledge of customer retention, you provide more value as a marketer, whether you're working as a consultant, running your own business or doing in-house work.
Do you have any customer retention techniques you'd like to share with us? How have you turned a negative into a positive and gained a customer for life? Share your experiences in the comments, we'd love to hear from you!
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