Existing customers are 60-70% more likely to make another purchase. The likelihood of selling to a new prospect? Between just 5-20%.
With statistics like this, the power of customer retention is undeniable – and is such an important aspect of a successful business. So, how are you making sure your loyal customers always come back for more? We’ve listed our top 10 retention strategies that work for small businesses.
What is Customer Retention?
The definition of customer retention is the actions a business puts in place to help retain business over a period of time. These actions are usually centred around customer loyalty and brand loyalty initiatives.
Benefits of a Customer Retention Strategy
An imbalance of input to output ratio is often seen in business, which is often called the 80/20 rule or the Pareto principle. One thing this applied to is your audience – 20% of customers account for 80% of total profits. These people are the ones that are loyal to your brand and keep coming back to repurchase.
Putting effort into increasing customer satisfaction/retention is just as important as acquiring new ones, because they’re already more likely to make a purchase.
How to Improve Your Customer Retention Programme
Loyalty SchemesHere in the UK, we love loyalty and reward schemes. According to YouGov’s report 77% of Brits are loyalty programme members, and 72% of us believe they’re a good way to reward regulars. As much as 59% actually believe every brand should offer them!
Rewards programmes are a fantastic way for small businesses to boost customer retention levels without breaking the bank. All you need are some custom printed loyalty cards and a stamp, and you’re good to go!
Need a little inspiration? Check out our favourite loyalty card designs.
Establish Your USPsRetaining customers is all about offering them a service they can’t get anywhere else. The world of online shopping means today’s regulars are faced with choices on a daily basis, so it’s key to think about your business’s unique selling point (USP).
This could be anything from your unique target audience and the services you offer to the price and quality of your products. Maybe you handmake everything you sell, or maybe your team have a higher level of skill and experience than those of competitors.
And once you know what it is that makes your brand stand out? Make sure your target audience knows it too!
Show AppreciationYou can shout about how amazing your product or service is until you’re blue in the face, but with 70% of buying experiences based on how the customer feels, showing your appreciation should never be overlooked.
- How you do this is completely up to you. Examples include:
- Sending a handwritten card
- Giving out offers to top clients
- Hosting competitions to win branded merchandise
Manage Your Online ReviewsOnline customer reviews are becoming increasingly important with 90% of consumers reading them before visiting a business. And if you thought word of mouth referrals were key, 88% believe online reviews are just as trustworthy!
When a customer has a bad experience with your business and leaves a review telling you exactly why, it’s important not to ignore them. Always respond and try and resolve this issue – this is sometimes all it takes to make sure that customer returns.
It’s also good to try and find any patterns in your online reviews – are the negative ones about the same thing? If so, use this as an opportunity to improve your business and give clients more reasons to stay loyal.
Treat Employees WellThe quality of your customer experience can make or break your small business’s success. And if your team aren’t trained and are undervalued, they’ll struggle to reach their full potential and may even cause once-loyal customers to shop elsewhere.
According to our recent survey, 53% of employees state lack of budget as what’s stopping them from providing ongoing training for their workforce. One way to keep costs down and still provide for your team is for all training to take place inhouse – let more senior members of your customer service team train up newer members!
Keep reading the results of our survey here and find out our top 5 tips for on-the-job training.
Establish TrustBuilding trust for your brand comes down to one key thing: delivering what you’ve promised. Customers who give you a try are more likely to return if their first experience of your business was a trustworthy one.
One way of doing this is to make sure all of your communications with your new customer look professional. As much as people say ‘never judge a book by its cover’, this is far from the case in reality – especially in the B2C world. From emails to direct mail, everything you create should have quality in mind.
Another way to do this is to show the human element of your business and give customers something to root for. 91% of consumers want the brands they follow to be authentic. Tell your brand story and show that the people behind the business really care.
Build a Social Media PresenceWith over 2.5 billion users worldwide, social media is a fantastic platform for your business – and there are plenty of ways you can use it to strengthen your customer base.
Firstly, it’s a way to build relationships with your customers. You’ll need to create content that’s valuable to your audience without being overtly promotional. (Remember the 80/20 rule? This applies here too – 80% of content should add value, 20% should sell your products.)
You should also make sure to engage with your audience. Ask questions, make the most of interactive elements like polls, share customer images and generally create excitement! You could also offer exclusive discounts to your followers to encourage long term followers.
Measure the ResultsOnce you’ve implemented your customer retention strategies, all that’s left to do is keep an eye on your progress.
Before you start your new customer retention plan, measure a baseline and set some goals – that way, you’ll be able to truly measure performance. If things aren’t going as well as you’d like, there’s nothing stopping you from switching and changing; just go with what works for your business.
The key takeaway from all of this? Put your customers at the heart of your business and make sure every decision is based on their experience. The happier your customers are with the service they’re receiving, the longer they’re going to hang around.