How to Maximize Customer Retention for Your Business
It’s necessary for all business owners to formulate ideas on how to attract new customers. But a salient question can’t be ignored: What about the customers you already have?
“While we always want to bring in new customers, an economy that is plagued by inflation presents new challenges,” said Jeff Meeks, VP of Sales and Marketing for EnergyFit, an exercise equipment and apparel company.
“Our tactic has been to refocus our marketing on customer retention. By creating loyalty programs, return customer discounts, and other customer retention programs, businesses can bring down their costs and maintain purchasing rates closer to pre-inflation [rates].”
Jeff Meeks, VP of Sales and Marketing at EnergyFit
Consider putting renewed emphasis on your existing customer base, as it can be a huge driver of sales. Here are some tips to maximize the impact of customer retention for your business.
Invest in a CRM tool
Companies large and small use CRM tools to collect and analyze data on their customers. Examples of popular CRM tools include Salesforce and HubSpot.
CRM stands for customer relationship management, and that’s appropriate. Why? Because knowing the nature of the relationship between you and your customer will inform your strategy on how to persuade existing customers to keep doing business with you.
CRM platforms are great organizational resources that allow you to view all pertinent information in one place. With a CRM, you can track customer engagement and account activity. If a customer hasn’t engaged recently, you can reach out via email to make that personal contact. Every touchpoint matters.
A CRM keeps data on important dates like birthdays and anniversaries of when customers began doing business with you. That kind of personalized information can be an effective springboard to engaging or re-engaging with a customer.
“An organization’s decision to engage and retain its customers must be on the forefront of its business strategy. Once that choice has been made, and a plan centered on retention is defined, a CRM system becomes the most important instrument any business can have to maximize customer value.”
Lawrence Bader, AVP of Marketing Journeys at Axos Bank
Listen to your customers
Ultimately one of the most powerful ways to retain customers is to systematically ask them about their experience and listen to their replies. Here, too, CRM platforms can be useful by powering surveys that measure customer satisfaction or enthusiasm.
Customer surveys take various forms and go by different names, but they provide at least three important benefits:
- They allow you to identify your most fervent and engaged advocates, who can be served up special deals and loyalty offers (more on this below) and who can serve as your brand ambassadors.
- They help you identify customer pain points and fix them.
- They provide satisfaction metrics that can be tracked over time, so you can see if your efforts are working.
Use familiarity to your advantageYou have data points and knowledge about current customers, and they’re familiar with your products and services. In other words, you have a relationship. When you nurture that relationship, your business reaps the rewards.
Key reasons to focus on customer retention:
- It’s more expensive to recruit and attract new customers.
- Existing customers are more likely to purchase your new products.
- Brand loyalty drives most successful businesses.
- Current customers produce more revenue.
According to customer experience company InMoment, 77% of customers have fruitful relationships with brands for up to a decade, driving home the importance of developing brand loyalty. And there’s a significant cost associated with targeting new customers —a Harvard Business Review study determined that bringing in a new customer can be five to 25 times more expensive than retaining a current one.
It may seem obvious, but another factor that can be overlooked is the success rate of selling new products to your current customer base. Existing customers are far more likely to purchase your latest merchandise. Plus, you can more easily cross-sell products to them than to people who have not already done business with you.
Reward customer loyalty
If you want customers to be loyal, reward them for purchasing your goods and services. Most companies have a rewards program in which points are earned through purchases, and those points can then be used for discounts or free items.
Offer your most loyal customers rewards that aren’t available to everyone. These customers have developed an affection and affinity for your brand, and this is a way to return the favor by making them feel special.
A survey from marketing services company Kelton Global found that 58% of shoppers said an exclusive offer would make them more likely to purchase, and 82% responded that it would increase how often they spend money with a brand.
Ready to open a new small business bank account to handle your growing income? Axos Bank provides personalized service and a knowledgeable team to help set you up with the right accounts. Talk to a business banking relationship manager Monday-Friday 6 a.m. to 6 p.m. PT, excluding federal holidays, at 844-678-2726.