What are the best customer retention strategies? Customer retention is the ability to get business from your existing customer. It can be direct from them or from their referrals.
The majority of businesses get business from their repeat clients, and this has been a constant in most of my engagement with entrepreneurs. Some businesses do not have specific referral structures but rely on the hope that their customers will give them referrals. A strategic referral structure will give you more results; the customer knows for every new client they bring on board, this is what they get in return.
How do we retain the customers that we have? It costs you five times more to acquire a new customer than to retain the one you have for the same value. That means if you want a new customer who will spend USD 1000 in your shop, and you have an existing customer who has the potential to spend an additional USD 1000 in your shop, it is going to take you five times more to bring in a new customer to spend 1000 than it will cost you to get additional USD 1000 from the existing customer. Therefore, our client relationship management or retention game must be very strong.
There are four strategies that improve and grow your business if you are able to apply them.
1) Create customer communities around your brand
You need to create a community around your brand. After profiling your customer, in terms of their preference, in terms of preference in communication and products, you can be able to form small communities around them. The communities enable them to address their unique needs and interact with each other. The basis of those communities must be your brand.
Every community has a culture, and this culture must be defined clearly. That means if you’re running a Facebook group for your brand, you must be clear on the terms of engagement; you must be clear on the dos and don’ts; you must be clear on the purpose of that group that is defining the culture you want in your community.
Culture must be communicated within a certain framework. You must decide what you need in a group like active participation, feedback, respect, confidentiality, etc. You must also identify ways to communicate with your community.
Lastly, for every community engagement, you need results. Have a purpose for these particular communities that you’re creating around your brand, which is about maintaining and retaining your customers. Make sure that customers feel served, loved, and engaged at every given opportunity.
They could email customer communities or social media communities. They could also be communities that you meet physically as a group to discuss a common agenda, which is your brand. That is a strategy to grow sales from our community, once you have it, customers will not buy elsewhere. They will be loyal to you and will provide you with the feedback you want on the product.
2) Leverage analytics to monitor your customer journey
You need to have a mechanism to identify the data from your customer. You need to be able to say customer X moves from step one to step four, and then define it. One customer might call, inquire, and then buy at the same time. Another customer might call, inquire, go quiet for a week; after prompting them; they inquire again, then they buy.
As a seller, you need to identify what is the external customer journey and the internal customer journey. The internal customer journey is the processes that you have put in place to be able to guide the milestone of a customer from knowing about your product to buying your product to paying. Ensure that you have analytics to monitor your customer journeys.
3) Measure customer lifetime value
When you have a customer database, you need to go back to it and look at customer X, what is the potential of this customer? How much can they buy from me? How often can they buy from me and for how long should they buy from me? If you know how much they can buy, how often they can buy, you’re able to calculate the customer value.
For example, for an automotive spare parts dealer who has a client who buys from them products worth USD 500; assuming the client indicates they will be buying for the next ten months and the salesperson is good at it he/she can confidently be able to say they will make USD 5000 from this one client in the next ten months. The salesperson will do whatever it takes to maintain this customer.
If the salesperson is able to project this for the whole customer database, they can forecast and measure the amount of sales that will accrue from the existing customers as well as projected new customers.
Some customer relationship management systems are able to generate the customer lifetime value, and you’re able to say my customer focus will be more on these particular customers because they are going to give me this amount of business for this duration.
4) Improve your customer experience across all channels
Improve your customer experience across all channels; customer focus is something that you need to start from day one. Customer focus is how you make the customer feel. It is not how you want the customer to feel. You need to put in place measures to ensure that customers have a good experience.
You need to stop assuming you know what the customer wants. When you know what the customer wants, you structure your customer service to what they want. We have four types of customers.
o Customers who want to know every detail
They just want a lot of analyses and information about your product. They want to be updated about your product and all that should be profiled for them.
o Customers who don’t care about your product
They buy because you are very nice and sweet to them. They know each other, and they interact with you. They only buy for that reason. Keep them and profile them.
o Customers who do not want stories
They do not even want to know your second name. They have a problem, and you have a solution. They are direct and to the point.
o Customers who are very amiable
They will never complain and are loyal to you. If you do something wrong to them, they will not ask any question, but the moment they’ve had it, they will go and never come back. Just because they are quiet and understanding does not mean that you do not pay attention to them.
Profile your business to respond to this for four types of customers and serve them. The more you improve your customer experience, the more they will buy from you. Customer experience is the new and the greatest competitive advantage across all businesses. If you do not have a customer experience strategy for your business, you’re losing out big time. Look at these four strategies; identify which is the strongest and weakest in your business and what you need to grow sales from these particular strategies.
Conversions: Qualify & Quantify
In customer retention, the measures or metrics of your conversions to help determine what Are the best customer retention strategies are as indicated below.
Are you becoming an influence in the sector that you are in; are you becoming a voice in the sector that you are in; are you gathering a following in the sector that you are in? That’s why exposure is very important; make sure people notice, for instance, if you’re in this forum. The level of influence from your customer is measured by your level of knowledge and competence.
Number of referrals you’re getting from your customer. You need to have a referral structure. You will get a lot of business the moment your customer knows what is in it for them if they refer or give you business.
Loyalty is measured by having a fan base in good and bad times. You have customers who will take a bullet for you, who will say, yes, he messed up this time, but I know him, he will come back. It must have been something wrong. Now, do you have customers in your business who are that loyal?
How much revenue have you made in the last six months from existing customers? Just do the math and that will be able to tell you whether or not customer retention is your model. Is it your mode of survival? Then you can create a relationship to safeguard the customers that you have.
How many sales can you attribute to your customer retention strategies? You need to measure the sales attributable to retention activities.
Every business needs to leverage both internal and external acquired data to come up with the best customer retention strategies for their business.
What are the best customer retention strategies to grow a business? It will be informed by insights from the data.