What’s more important than getting new customers? Keeping them.
Did you know that it costs five to seven times more to acquire new customers than it does to retain them? And did you also know that repeat customers are more likely to return with every purchase? This study found that after one purchase, a customer has a 27% chance of returning. However, after three purchases, a customer has a 54% chance of returning. Instead of putting all of your energy into getting new customers, it’s more profitable to keep your current customers happy.
So, how do you do that? In this post, we’ll discuss simple strategies that any business owner can use to improve their retention rates. Let’s get started.
Map Out the Customer’s Journey
One of the easiest things you can do to retain your customers is to map out their journey with your business. Where do they come from? What path do they take from product awareness to purchase? What happens after they’ve made their initial purchase with your business? Where does the journey end?
Knowing the answers to these questions will allow you to create meaningful moments of engagement with your customers during key decision points. For example, if you know that a customer is vulnerable to leave after a year with your business, what can you do to keep them? It may be as simple as sending a “How are you doing?” email.
Instead of responding reactively, you can use your map to find key points when you can reach out to customers proactively.
After you’ve mapped out the customer’s journey, look for opportunities to interact with that customer along the path. By inserting small moments of engagement throughout the journey, you’ll nurture a mutually rewarding relationship with the client.
Invest in Customer Success
Price isn’t the number one reason customers abandon your product. Here's what causes people to leave: Click To Tweet
Believe it or not, price isn’t the number one reason why customers abandon your product. Over 50% of customers will leave after just one negative experience with your company. That dissatisfied customer will then go on to tell between 9 and 15 people about it (hello, social media rants). Even worse, 96% of people never complain.
This is why it is not enough for a customer to buy your product. They should also enjoy using your product and wish to tell others about it. The way to make that happen is by investing in your customer’s success.
Create a dedicated customer success team to ensure that your customers are happy with your product. Your customer success team can reach out to your customers during their journey and help them meet their individual goals with your product.
But, if you don’t have the budget for a full team, you can also tap one person to act as your customer success manager.
Keep Them Engaged
Retain customers by staying at the top of their minds. In other words, don’t let your customers forget you. If they’re constantly using, learning, or thinking about your products, they’re more likely to stick around. Here are a few ideas for how to keep your customers engaged:
- Create a blog and post regularly (Here’s how to develop a successful content marketing strategy that includes blogging)
- Send out a regular email newsletter with relevant information about your product and upcoming events (Here’s a guide to engaging your email subscribers)
- Remember to segment your email list for optimal results (Here’s a beginner-friendly guide to segment your email list)
- Provide in-depth tutorials to ensure that your customers understand how to use your product
- Share testimonials and case studies that show how other customers use your product (Here’s a guide to creating compelling case studies that can also work as lead magnets)
- Thank your customers for their loyalty often and sincerely
- Send them gifts like t-shirts, hats, cookies, candies, and gift cards
- Invite them to try new product features
- Offer exclusive sneak peeks and discounts for upgrades
- Recommend products based on the customer’s needs/goals (use surveys to give you necessary insight)
- Hang out with your customers on social media
- Set up targeted ad campaigns on social media to reach out to customers who haven’t visited your website in a while or aren’t responsive over email (Here’s how to use Facebook to reach out to both current and prospective customers)
Raise Your Price
Did you know that raising your price also raises the perceived value of your product? A lot of businesses delay price hikes until they have no other choice but to increase hikes. While it’s tempting to do that, keep in mind that you may lose more customers that way.
Here’s a common scenario: Three years ago, you started your business by selling widgets for $100 each. Your widgets were competitively priced. But as the years passed, others inched up their prices but yours stayed the same.
Now, three years later, you can’t sustain those low rates and have to catch up, especially because you need to update your widget’s features. You hike up your prices to $150 per widget.
Your customers die of sticker shock and leave because they don’t see the value. And it’s true. You haven’t actually updated your widget in three years because you couldn’t afford to.
But what if you raised your prices every 6 to 12 months instead? You could gradually turn up the heat with a 5 to 10% price increase every year. This enables you to update your features in accordance with what your customers need (rely on your survey answers for this).
Show How You Compare to Your Competition
You have competitors, right? Don’t act like they don’t exist. And don’t be afraid to show how you stack up. Even if you don’t acknowledge your competition, I’m willing to bet that your customers already know about them. Instead of ignoring your rivals, show exactly how you compare to them.
Create a post that pits your product against other similar offerings. This allows you to emphasize your unique value proposition. Then, send out that post via email to your current customers to show them what they’ve gained by using your product.
Does this strategy feel risky? Yes. But in reality, your customers will love you for being transparent and showing them how your product compares to the rest.
You can also include testimonials with the email to show real-life examples of other customers who’ve benefited by using your product. This taps into social proof which builds confidence in your product.
You’re not a mind reader. Instead of guessing how your customers are doing, ask them. This is an essential task that’s performed by your customer success department. However, without a full team, you can still gain insight about your customers.
At least twice a year, send out a customer survey. Ask your customers straightforward questions like:
- How often do you use our product/service?
- What’s your favorite feature?
- Is there anything you’d like to improve or change about our product?
- On a scale of 1 to 10, with 10 being highly satisfied, what would you rate our product/service?
- Would you recommend our product/service? Why or why not?
Remember not to ask too many questions. Keep it to five questions or fewer for maximum response.
Retaining your customers will increase your profits and grow your business. Implement the above strategies to hang on to your customers.
Before you go, check out these related posts:
- How to Engage Your New Email Subscriber
- Using Lead Magnets to Bring Back Churned Customers
- How to Create Customer Personas From Scratch