Business and industry leaders of any kind have various goals they wish to achieve, but one they most certainly have in common is growth. When you think of business growth, that usually pertains to gaining new customers. Although this is a key to success, the plan for acquiring those customers in order to grow your business isn’t always as cost-effective or beneficial as it may seem. This process requires identifying, qualifying, and nurturing leads to then hopefully convert those leads into paying customers. So rather than only focusing on gaining new customers, a more effective way of reaching your growth goals is to invest your time in retaining your existing customers.
Depending on certain factors of your business such as industry and size, acquiring new customers can actually cost between 5 and 25 times more than retaining an existing customer. Customer retention is important to the overall success of your business for a few reasons:
- Repeat purchasers spend more and generate larger transactions
- Repeat customers bring in more business by referring others (word-of-mouth marketing)
- Customer retention lends itself to customer loyalty
Let's take a look at some ways you can boost your customer retention to grow your business.
Adjust Your Pricing for Returning Customers
You can adjust your pricing in certain ways in order to entice customers to return. This can be done by offering discounts and coupons for their next purchase via email, free shipping and returns, as well as price-related perks for frequent shoppers.
Customer Loyalty Program
Implementing a program to reward your most loyal customers is an easy way to build on existing relationships and offer regular incentives for them to return to your business. Rewards can range from a thank you note to free shipping to 10% off. You'll eventually know which customer demographics, actions, and preferences predict a successful conversion after an offer. You can also expand your loyalty program by adding a points system, which allows customers to earn points for actions like sharing your content on social media or referring a person within their network who makes a purchase.
Cross-selling and Upselling Strategies
Upselling in a physical store is quite simple as you can place related products next to each other to draw attention and drive impulse purchases. However with online shoppers, they often begin their shopping with a particular item in mind, which is why you must be strategic when cross-selling and upselling. A good place to start is by looking for patterns throughout your sales data and asking yourself the following questions:
- Are there two or more items customers often buy together?
- Which items have upgrades worth mentioning?
- Which items complement each other and are more useful when paired?
A more basic level of these tactics is to offer free shipping when customers reach a specific shopping cart total, which will ultimately want them to purchase more to reach that offer.
Meet Your Customers Where They Are
When you have a good understanding of who your customers are and their needs, you’ll be able to meet where they are better. This refers to creating the type of content they need such as blogs, videos and social media content, and sharing it wherever they are i.e websites, media channels, social platforms, etc. By doing so, you can gain loyalty and brand recognition by reminding them how much you understand and value them.