It’s no secret that retaining existing customers is better for business. According to recent statistics, acquiring a new customer can cost as much as five times more than maintaining a good relationship with an already-existing customer. Increasing customer retention by only 5 percent can increase a business’s profits by 25 to 95 percent! Selling to a customer you already have is successful 60 to 70 percent of the time while convincing a new customer to purchase from you is successful 5 to 20 percent of the time.
With all of these numbers in mind, here are four simple changes you can make in order to have a positive impact on your customer loyalty.
1. Listen to your customers
In order for you to gain customer loyalty and master customer retention, you must listen to what your customers are saying. This entails more than responding to their questions and inquiries. It also means hearing their complaints and genuinely trying to get to the bottom of every issue. It means picking up the phone when they call, replying to their emails and responding to their reviews and comments on the internet.
Listening to your customers can also mean taking their advice. Don’t react to a customer’s words as you would to an older sibling trying to boss you around. Don’t assume their advice isn’t valuable just because you might not want to hear it. Actively collect feedback from your customers and listen to what they have to say in order to build your customer retention.
2. Respond to your customers
Research shows that 76 percent of consumers firmly believe that a company’s ability to provide proper customer service is a direct reflection of how much they value their customers. Responding to your customers in a polite, professional manner is a crucial aspect of good customer service.
While responding in person or over the phone is more or less easy to do, customers expect a response from email and social media, too. Research suggests that the average customer expects a quick response from social media, with 42 percent of customers expecting a reply within an hour and 32 percent expecting a response within 30 minutes of leaving a message.
This response rate is difficult to maintain for both big and small businesses. Consider initiating automatic replies on social media, email and phone messaging avenues in order to ensure that your customers know their message is important to you and will be responded to as quickly as possible.
3. Offer more than sales
A business obviously needs to offer products and services for sale in order to make a profit. These sales are what pay bills, initiate growth and keep people employed. If you only connect with your customers when you want them to buy something from you, however, then you’re more likely to push them away than drive a sale. Peppering your customers with your latest deals and promo codes might sound like a good idea, but soon they’ll grow bored of hearing from you and distance themselves.
In order to maintain customer retention, consider offering your customers free valuable information that will help them out without them needing to buy from you. These can be relevant articles, your own personal blog of information, local news, events, networking opportunities and more. Show your customers that you’re thankful for their loyalty. Connect with them on a deeper level rather than just to ask for their money.
4. Give your loyal customers rewards
Research shows that as much as 76 percent of women and 72 percent of men are likely to return to a business that offers a loyalty program. Offering a rewards program, gifts or thank-you's to your loyal customers is one of the best ways to retain their loyalty and keep them coming back.
This strategy works because customers feel appreciated when a business offers them a gift, exclusive offer or personalized discount. They can decide to spend their money practically anywhere, but they’ve chosen to invest in you and your business. The least you can do is show them you appreciate them and thank them for their loyalty.
Seeing your customers as real people rather than dollar signs will help you increase your customer retention. Customer loyalty is a fragile thing in a world filled with convenience and competition. Do your best to show your customers that you see them, appreciate them and value them. Your business won’t regret it.