Customer acquisition vs. customer retention, [where should your focus be?]
Most companies I consult for are obsessed with acquiring new customers and rightly so. Quite simply, without customers, you do not have a business.
Getting vital traction (as a startup) and building your customer base as an established business determines your success and survival.
However, there is a big change in the way consumers buy products and services. Today's smart and savvy customers are not swayed by marketing hype. They are hyper-researching and validating everything. They do not trust advertising as they used to, and so, it is very challenging to reach, nurture and convert your prospects.
There is a flip side approach to growing your business.
Given that potentially 80% of your business comes from 20% of your customers, and the cost of customer acquisition is so much higher than retaining them, customer retention and loyalty should be your priority.
The question is; what are you doing to create ultra-loyal returning customers who will also spread the good word about your business?
Here are a few helpful tips:
1.The purchase follow-up:
Understand that the transaction is just the beginning of the new journey. The real magic happens right after the purchase or sign up for the trial.
This period is crucial. Anticipate issues like buyer remorse and show them the brand ‘love’ by helping them get up to speed with the new product.
Design a customer onboarding process, to help your customers get familiar with your product and have a great first experience with your brand.
I know of companies that send out daily ‘help’ emails and provide member access to training during the trial period along with a live chat feature and weekly webinars. A great way your increase your trial conversion rates.
Give regular tips and tricks on how to get the best out of the product. Offer help before your customers ask for it. Show that you care about achieving their goals and not just about selling your product or service.
This creates a strong positive perception of your brand and goes a long way in building a positive customer relationship and yes, loyalty.
2. Surprise and delight
We all love surprises when we get them, but how often do we give our existing customers a surprise?
When it comes to nurturing your customers, think of a valuable offer that you can offer them – without their knowledge.
Surprises come suddenly. These not planned. Surprise packages or offers don’t cost you a fortune.
Jawbone sends a handwritten note to its customers, and they absolutely love it, because it shows how much the brand values them, since they took the time to write to every customer manually.
Zappos puts a surprise gift in repeat purchases, they also occasionally send a celebrity to deliver packages to their customers. Imagine the social currency and customer relationship ROI they get from doing this.
Sometimes just a non-salesy call to say ‘hi’ does an amazing job to re-engage existing customers. These random check-ins, add a human dimension to your business and shows that you care about their success.
If you want your customers to stay and connect with your brand, then you should go beyond just the product or service you offer.
Many companies create a communication calendar to keep in touch with their regular customers, a great idea.
3. Learn from customer complaints
Do you typically shy away from customers who complain?
On the contrary, you should run to them. This group of customers who complain (to you or others) are your greatest marketing asset.
It’s through complaints that you get to know the shortcomings in your products and services. Complaints reveal what you should improve in your business and what to ignore.
It is in customer complaints that you know what your customers care about, and what they expect from your products and services.
Your 'haters' will be your most loyal customers once you help them and solve their problem. 80-90% of customers who have had a bad experience, just quietly leave. The ones who complain, care enough about you to do so.
4. Turn your customers into your marketers!
By providing great after sales value in the form of useful and helpful information, you are building a long-term relationship with your regulars. Today that is easy with automation and smart surveys.
By seeing that you are helping their business grow and playing a part in achieving their goals, you are top of mind for them and the best part; they do your marketing for you, spreading that valuable word of mouth.
A recent survey indicated that organizations that relate to their customers more than 10x a year have 300% more profit more than those that lost contact with their customers. We are talking about great customer lifetime value here.
So, are you thinking of your customers as your marketing team? You should be! Engage with and delight your existing customers and see what happens to your business.
Delighting and retaining your customers has never been more critical today. In a hyper-competitive economy, and with customers in control of your brand, customer experience becomes your key differentiator.
While getting new customers is definitely important, focusing on retaining the ones you have, should be a priority.
About the author
Ashok Miranda is a Business Transformation Architect and founder of Transform and Transcend. He is the author of the book: Culling Culturitis, How To Rid Your Company of this Toxic Disease and Build a Winning Company Culture.
As a speaker, consultant and trainer, he is passionately committed to architecting a better business world by building purpose-driven companies that nurture happy and engaged employees and positively impact peoples lives.
He connects the dots between company culture, branding, marketing and customer experience and works with business leaders, owners, founders and HR professionals to transform their companies for success in the digital age.
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