Companies love to celebrate new business. They give sales awards for volume, the number of accounts added, and conversion rates. But there are a lot of reasons why your company should shift some of your focus to retaining customers. Take a look at some compelling statistics:
- Gaining a new customer is five times more costly than retaining an existing customer.
- Loyal customers will spend 33% more money with you than a new customer will.
- Free returns pay off as 78% of customers end up buying more in the long run.
- Poor service is motivating; 33% of customers switch companies because of it.
Customers are demanding a lot from their brands; they want a personalized experience that anticipates their needs because the company “knows” them so well. It’s a high standard for companies to meet, but it comes with some hidden benefits. Customers are prioritizing their relationships and experiences with brands over factors like price, so companies can offer these high-level experiences without feeling like they can’t charge for them.
As Millennials influence more and more of the spending patterns in the economy, it’s helpful to know that 80% of this generation has a great track record of loyalty. They say they are willing to give their trust to a brand with excellent customer service and commit to being long-term customers. On the other hand, 51.5% of Millennials say they have switched brands because of poor customer service.
You probably already knew that retaining customers with great service is a key business strategy, and maybe you even already have it in a healthy perspective compared to gaining new customers. But how do you implement strategies to boost customer loyalty? Here are a few ideas:
Consider a Loyalty Program
Loyalty programs are associated with high levels of retention; these customers are shopping not just on price but on experiences and the perception of shared value. They also tend to spend almost 18% more than regular customers. Giving your customers a thank-you gift is a great way to build loyalty and celebrate an ongoing relationship.
Offer Educational Opportunities
Think of education broadly, with a span of ideas that includes how-to videos, a blog that takes a deep dive into a charity your company supports, or a TikTok clip with a quick, interesting fact about your product. You can go a lot of directions with your content, but it should always be focused on providing value to your customers, not telling them how great you are.
Don’t Miss the Momentum
If you have a new service or product line that is creating a lot of buzz with new customers, think about how to expand that excitement to your existing customers. They may want to add it to their regular purchases, but they may not even know about it because they’re so accustomed to ordering “the usual.”
Measure What Matters
Get a closer look at the behaviors of repeat customers and how they compare to other sales. Measure your repeat sales, your order frequency, and average order value for new customers versus retained customers. The right metrics can help you refine your strategies and look for ways to increase repeat business.
Ask for Feedback
You can always simply ask your customers what made them return for a second-order, why they chose your product over a competitor’s, and what aspects of their purchase are most important to them.
At DirectMail.io, our all-in-one marketing automation solution allows you to use data-focused techniques to engage with your existing customers and turn them into long-term, loyal fans of your brand. Contact us today to learn more.