4 Ways To Retain Customers

Ask a business owner what their top business goal is, and the word that will hangs off the tip of their tongue is growth.

When you think of business growth, you probably visualise hordes of people sweeping in a store on Black Friday ready to spend a fortune. Fair enough, this seems like an effective way to drive sales and profit. Is it sustainable though?

Although acquiring new buyers is great, mapping out a roadmap on how to achieve this and scale your business isn't the most cost-effective route you can take.

And I'll tell you why: Think of all the marketing assets and ever-advancing technology you'll need to leverage in order to identify your target market, pitch your value proposition to prospects, nurture leads and, if you're lucky and persuasive enough, convert them into buying customers. Do the maths on how much these means account for each customer and come back to me. I'm waiting... *taps foot*

Yeah, that's why! Investing in obtaining a new customer will probably cost you 30 times more than showing some love and appreciation to an already existing one! Open that enormous window of opportunity then, and distribute your investment strategically between the two fronts of acquisition and retention.

So, instead of fixating on the aspect of customer acquisition to accelerate your growth, bring your high-value but often neglected converted customer base to the frontline and fight to retain it.

How to Calculate Customer Retention Rate

Follow the formula below:

Every customer is a small win for your business, so don't take their contribution lightly.

If the above equation was a brain overload, all you have to do is count the number of customers you had at the start and end of the time period that you want to calculate retention (e.g. weekly, monthly, quarterly, annually). Then, quantify the number of new customers you gained during the same time period and plug the number you got into the given formula.

Next, let's take a peek at some facts:

The volume of repeat shoppers’ purchase soared 30% higher than that of existing ones, while the number of items bought was 40% higher.
44% of businesses focus on customer acquisition, while only 18% focus on customer retention.
The probability of selling to an existing customer is between 60% and 70%.
77% of consumers unanimously claim that what makes them loyal to a brand is great customer service and quality products.
70% of consumers say they have already made a choice to support a company that delivers great customer service.
52% of consumers have made an additional purchase from a company after a positive customer service experience.

Ways to Boost Your Customer Retention Rate

The following points are customer retention boosters that could be used for virtually any sort of business type and size. Don't be scared to take a deep dive into the pool of creativity to see what suits your audience best. Remember that you're never solo in the marketing arena — there's always people who will like or dislike what you offer, including the throwdown (i.e., people with whom you compete to win customers.

1. Adapt pricing to tempt returning customers

Many customers tend to return so long as you offer a good ol' bargain or any kind of “treat” in exchange. If you can't lash out with repeated giveaways, adapt your pricing and give your one-off buyers enough incentive to come back.

If you want customers to conduct more business with you, try lavishing their inbox with discounts for their next purchase(s). Free shipping and zero-cost returns as well as additional price-related perks for frequent shoppers are a good starting point.

2. Have you tried upselling and cross-selling?

Make sure that every visitor turns into a shopper and checks out with a lil bit extra in their basket. How? The secret formula is boiled down to two terms: cross-selling and upselling. Good news is that there are no restrictions here — feel free to implement both of them across all your physical and digital (e.g your website, social networks) touchpoints.

Upselling to buyers in a brick-and-mortar shop is easy and H&M is a glaring example of this. This multinational retailer has been building revenue through upselling for years by placing related merchandise, such as socks, reusable bags, hair removal roll-ons near the cash register to spark impulse shopping.

Things get tricky when we're talking about online marketing and shopping, though. Most of the times, e-browsers click on a website knowing exactly what they want to purchase. In this case, it's worth strategising your upselling and cross-selling approaches.

Kickstart your sales and digital marketing strategy by identifying repetitive consumer behaviour via your sales data. Follow up with a set of questions:

Do customers tend to buy items in sets?
Is our stock more useful and sells better when paired?
Are there products that can be re-branded, thereby do better from a sales perspective?

You can adopt similar low-cost strategies upon checkout, e.g. reward your customers for reaching that far by offering free delivery or 15% off when they hit a specific shopping cart sum. Not only will this initiative prompt buyers to return, but you'll also manage to establish a sustainable relationship with them.

How about you also email your newsletter subscribers about special offers every month? You can do so by segmenting your email list based on factors such as age, gender, education, job title, buying history. Then, track your email analytics and see which offers resonate with your audience and adjust your strategy accordingly.

3. Personalisation is key

There's no better way to build customer loyalty and motivate them to return than a personalised experience — this can be facilitating their lives while on your site through a well-curated UX design and a user-friendly front end navigation.

For instance, you can reduce bounce rates by urging visitors to fill in forms and sign up for perks, such as newsletter, vouchers, notifications about blog articles, discounts, etc.). Save their personal information (e.g name, email address, and birthday) including anything you deem fit to improve their experience.

Then, the next time they return to your site, you can display "Welcome back, [Name]" on a web page or automatically display the correct shipping details based on the contact information your form allowed you to obtain (which might also be saved in your CRM

4. Please your audience

When I say “please”, I don't mean the kind of pleasing that's found in psychological contexts and the negative connotations thereof. My kind of pleasing translates as knowing the people you're talking to. In the business world, this is commonly quipped as having “buyer personas”. It's about creating customer profiles in which you outline their hobbies, tastes, motivations, ideologies, needs, and challenges.

These tailored profiles will allow you to whip up website, video and social media content that meets the above characteristics, and then circulate it to whichever channel you deem fit by ensuring that your prospective customers will be there.

Be proactive, make them feel valued and rest assured that you'll be their No 1 choice.