Are you ignoring customer retention? If so, you’re working harder and making less money.
44% of businesses focus on customer acquisition, while only 18% focus on customer retention. (SEMRush)
In a world where businesses are always looking for new customers, it’s easy to forget about the ones you already have. But customer retention is one of the most important things you can focus on if you want to build a profitable, ongoing business.
Let’s get to it
What is customer retention marketing and why is it important
Customer retention is the process of keeping customers interested and engaged in a product or service. It’s important because it helps businesses maintain a loyal customer base, which can lead to increased profits and long-term success.
What are the different types of customer retention marketing
There are a number of different types of customer retention marketing, in fact, most of them are just plain common sense; communication, service, engagement, and loyalty programs are just the tip of the iceberg.
Communication. Keep in touch with your customers through regular email newsletters, social media posts, or even personal calls or visits. Let them know you care about them and want to keep them as customers.
Loyalty programs.These programs offer customers rewards for continued loyalty, such as free products, discounts, or bonus points.
Customer service. Good customer service is key to retaining customers. Make sure you have a team of dedicated employees who are willing and able to help customers with their needs.
Engagement. Keep your customers engaged with your product or service by releasing new updates, features, or products. If you can keep them interested, they’re less likely to leave.
How can you keep your customers engaged
There are a number of different ways you can keep your customers engaged. Here are a few of the most effective methods:
Acknowledge them when they interact with you in any way.
Here’s what that might look like
You notice that someone looked at your LinkedIn profile — send them a message that says something like “Hi! I noticed you stopped by my profile. If you have questions or if there’s anything I can help with, let me know!”
People engaged with a social media post — respond back to them and ask them a question; “What did you like about this?”
Ask a question in your emails and ask that they reply back – then start the conversation.
You get the idea — you engage first and keep engaging.
What are some common challenges with customer retention marketing
The biggest challenge with customer retention marketing is that it takes time and energy away from generating new business.
I get it. If you don’t have new customers, your business might not grow, but if you keep the customers you have and sell them more stuff, you’ll actually be working less and earning more.
Here are the basic steps involved in that.
Make customer retention a priority
You have to make retention a priority. Here’s a great example. During the COVID shutdown, Vivek Bhaskaran, CEO of QuestionPro told his sales team to shift their efforts from getting new business to expanding the business they already had with existing customers. The results? 120% increase in sales! He says that COVID was their best sales year ever.
Create a natural path for customers to buy more stuff from you
Your customers aren’t aware of all the things you have to offer.
Whenever I do voice of the customer research I ask my client’s customers about the different products and services they purchase. But then I also read them a list of products and services and every single one of them asks to get more information about these additional products.
Make sure that you reach out to your customers and open up the conversation about all the different things you offer.
How do you measure the success of your customer retention marketing campaigns
To measure success, you’d have to have a list of customers and what they are purchasing from you. Then review this list and make a note of what they COULD be buying but aren’t.
In your CRM, add those recommended products to their profile.
In your next conversation with that customer, make sure you find a way to ask them about other needs so that you can recommend these other products or services.
If they are using an alternative or competitor, ask them what they like about their current solution and what needs improvement. Use this information to keep them updated and always stay top of mind.
What are some best practices for customer retention marketing
Aside from making customer retention a priority, here are several other marketing related tactics you can use to retain customers:
- Key account plans: If you’re in a B2B organization, create a key account plan for your largest customers. A key account plan puts you in partnership relationship with your customer where you outline client goals and create projects to help them achieve those goals.
- Subscription or membership options: Create offers that make it possible for customers to receive products and services monthly at a discount.
- Account reviews: Make it part of your process to connect with customers regularly to review what they are purchasing and what other products or services will help meet their goals in the future.
- VIP offers and events. Create special events and offers that are open to your top customers.
Where should you start when creating a customer retention marketing plan
The best place to start is to select those clients and customers who are most critical to your success.
Again, if you set customer retention as a priority, your entire marketing process will reflect that. Let’s look at each step of the marketing planning process.
- Research: Make sure that you’re constantly asking for and gathering feedback from your customers. THEN, don’t forget to implement as many of their recommendations as you can and COMMUNICATE those changes to your customers.
- Segment – Target – Position: The next big step is to take a fresh look at how you group your customers. This is the best time to consider doing “benefit-based” segments. Benefit based segments are focused on grouping your customers based on the value they receive from your product or service. A simple example might be customers who prefer to engage online vs in-person. These benefit segments will be different based on your product or service.
- Offer: This is your most powerful element of your marketing plan. You can design offers that give your customers an incentive to keep purchasing. This includes subscriptions, volume discount, loyalty discounts, etc.
Entrepreneurs, if you want to do less marketing and make more money, customer retention should be your number one priority. The tips we’ve outlined in this article will help you get started, but it’s important that you make customer retention a priority in your business.
Implementing these tactics may take some effort on your part, but the payoff is worth it.