Customers are the lifeblood of any company. Without a large number of people returning to your product or service, not even the best idea can save a failing startup. However, Arjun Setia of ProofHub has written a guest post that describes some tried and true tactics to help your company attract new customers and, even better, keep them coming back.
Business is a numbers game. How much revenue was generated? How many new customers wereacquired? These are the questions that run on every business person’s mind. And why not? After all everyone in a business is there to earn money. And getting more customers is the first thing that comes to mind when someone says making more money for a business. But in this post we are going to talk about a different perspective of business.
For a few minutes let’s focus on the sentence - "How many new customers wereacquired?" The keyword here is "new". Everyone thinks that acquiring new customers is the prime motive for a business. But it’s not like that. Here are some facts about customer acquisition that might come as a surprise to many reading this post:
Businesses have to spend approximately 500% more resources to acquire new customers than they do to keep the existing ones.
More than 82% of all the companies agreed that retention of customers is cheaper to execute than their acquisition.
This paints quite a clear picture of what’s the smartest investment for a business owner to make. However, there is a whole creed of businesses which are too focussed on getting new customers that they tend to ignore the existing ones. And that’s how they end up losing them, as a result of which profits start to decline, and it ultimately leads to huge loss in revenue.
Now the question is - what can businesses do to avoid such circumstance? That’s exactly what I am going to talk about in this post.
So, let us begin.
1. Get accurate numbers
There’s no denying that you every business loses customers. But to create a strategy to retain them, you need to have the accurate numbers first. Track and analyse the impact they are having on your business. And then move to the task of planning how to tackle the problem.
These numbers will help you to decide how much time and resources you need to invest to get things on the right track. Whether you need to bring in some new people to get with the retention strategies, or you can manage with the current team. All this can be decided only when you have accurate data about customers leaving you, for any reason.
2. Focus on CLV (Customer Lifetime Value) rather than CTV (Customer Transaction Value)
The names are quite self-explanatory. The first one stands for the value a customer will provide during his entire lifecycle with your business. The second one is the value your business will get on acquiring a customer. CTV can be looked upon as a one time sale, whereas CLV can be looked upon as multiple selling opportunities, which is obviously going to more than CTV. And that ultimately means more profits.
If your sales team is focusing on one-time investment from the customer, then it needs to bring a change in the strategy. Like the facts mentioned earlier, it is more profitable to earn from an existing customer as compared to getting new ones to buy something.
You need to start calculating the lifetime value that you can get from the customer, rather than just thinking it as a one time selling opportunity.
3. Offer value, not just products
This can be looked as an extension to the point I’ve mentioned above. Today’s customers want to feel valued. As published in a recent report prepared for The American Express - 66% customers are ready to pay up to 13% more to a company that delivers excellent customer service as compared to buying from the one that does not.
So it won’t be wrong to stay that you need to focus on making the customer feel the value they will get from your product or services. Because people are no longer inclined towards just low prices and big discounts. They are looking for the overall experience a product or a service has at offer for them.
4. Be good, always
Offering a value in your product is simply not enough. You need to deliver on it as well. Today’s competitive world requires businesses to do their best to retain customers. Because if they won’t, someone else will. You cannot afford to sell a product saying something, and not delivering on it. Customers are smart enough to switch towards a better option as soon as they get even a slight hint of it.
The solution here is to look beyond sales. It's as simple as that.
Your marketing team can rope in customers by exclaiming great things about your product service. But to become a reliable brand you need to be good, always. From selling the product to handling complaints and solving their problems. And delivering on the promises you made while selling them. Everything is important.
5. Build relationships, not customers
A good business is always about building relationships. Apple is a great example of a brand that does the same. They make customers feel privileged. This is why Apple has some of the most loyal customers. That’s just one example. There are numerous others who are following the same footsteps.
The bottom line here is to get the customer to return to your business, you need to build relationships. Let them know how much you value their business.
Small gestures like a thank you mail to let the customer you value him choosing you over others can do wonders to get connected with the customer on a personal level. And that’s best for your business.
6. Never leave your customers alone
Leaving a customer alone means you are opening up space where someone else can step in. If a customer is using your product or service, you must leave no window of opportunity open for someone else to be his head. You must keep reminding him that your service is always there for him, whenever he needs.
For instance, sending regular updates about what’s new in your business. Updating them about any new cause that are getting connected with. Sending personal greetings on birthday. All these can work great!
With all these things, the customer gets to know that you have not forgotten him. And no matter how big you have become, you still value your loyal customers.
7. Keep innovating your product/service
The most important aspect of customer retention is to let the customer know that you are not stagnating. Show them that you are still looking to go on from good to better and from better to best. The best way to do is to build a product/service innovating.
But, you can do it only by building a team that comes up with new ideas to better what’s already existing. So, apart from all the external factors mentioned in the earlier points you need to make sure that your internal structure is solid.
To sum the post here, I’d like to come back to the point where we started - numbers. The game is still about numbers. The only difference is instead focusing just on adding more numbers of new users. We are talking about the importance of maintaining what you already have, along with adding more.