Customer retention: boost CX and profits with one strategy
The hard facts surrounding customer retention make it impossible to ignore as a marketing strategy:
- You are 40% more likely to sell to an existing customer than to someone who has never bought from you
- Increasing retention rates by 5% increases profits by 25-90%
- Gartner estimates that 80% of your future revenue will come from 20% of your current customers
But in spite of the evidence, most businesses focus on attracting new customers, and very few devote much energy or budget to retaining and managing existing customers. According to research from Forbes, less than a third of business executives prioritise customer retention.
Customer retention strategies are often easier, cheaper and faster to implement than new customer marketing programmes.
After all, you’ve got a defined list of contacts, you know your audience well, and you already have the means to communicate with them.
Instead of having to pay to reach a new audience through advertising or direct mail, you simply use your existing marketing and communications channels to build on your existing customer relationships.
However, the simplicity of marketing to your customers doesn’t mean you can treat it lightly; your customers are one of your greatest assets, and you need to think carefully about how, when and why you communicate with them. Poorly-judged communications can easily undermine your customer relationships, damage the customer experience and nudge people towards your competitors. Any retention marketing campaign must be carefully planned and tested.
With that disclaimer in mind, let’s look at some broad customer retention marketing strategies.
Market to your existing customers
A common pitfall for marketers is to assume that existing customers are no longer prospects.
It’s as though once a prospect makes a purchase, they become invisible to marketers. But that’s a mistake, because your customers are your biggest fans; they are interested in your other products and your new services; they’ve tested your business and they like what they see.
So perhaps the first step is to start viewing your customers as a marketing segment and defining their needs. You may want to split your customers into several segments, according to demographics, purchases or longevity.
By simply treating your customers as an audience for your marketing, you will change the way you treat customers, and begin to give them the same attention, offers and benefits you give to prospects.
Engage your existing customers
Customer engagement is a core benefit of retention marketing. It simply means talking to your customers and reminding them of your value.
Are your existing customers making full use of your products and services? Are there other ways you could help your customers? By making sure that customers are getting maximum value – even if they don’t spend more – you reduce the chances of customers leaving you for a more ambitious competitor.
Communicating to your customers is the key thing, because even if customers don’t take advantage of your offers, they will know the offers exist, and they will factor those advantages into any comparison if they do look at competitors.
Improve the value and quality of your products and services
Your customers chose your business because they love the quality, design or value of your offerings. But over time, their needs may change, or they may be tempted away by rivals offering additional benefits.
So it’s important that your products and services don’t stand still. You don’t just need to keep pace with competitors; you also need to surprise and delight customers with unexpected improvements.
Dynamic customer communications from DocCentrics
Do you want to do more with your customer communications?
We can help you use advanced technology to reach your customers with the right message, at the right time, on the right channel. Our intelligent customer communications management (CCM) platform is designed to simplify and automate many common tasks, so you can focus on creating compelling messages and remarkable campaigns.
With DocCentrics, creating an omni-channel campaign for thousands of customers is as easy as writing an email.