Did you know it’s much easier to keep a loyal customer than acquire a new one? Returning customers spend more and buy more often, and refer friends and family. In fact, according to Harvard Business Review, strengthening your customer relationships and increasing your customer retention by just 5% can actually grow your company's revenue by 25-95%.
And the numbers don't lie: There are quite a few reasons why customer retention is critical to company growth and success:
- ROI: 80% of a business’ future revenue will be generated by just 20% of their existing customers. (Forbes)
- Loyalty: Loyal consumers will spend an average of 66% more than those who aren’t loyal. (Accenture)
- Involvement: Customers who provide feedback have a 1.4x higher lifetime value. (Thanx)
- Customer Experience: Commiting to customer experience can result in up to a 25% higher customer retention rate and revenue than focusing on just sales and marketing. (Gartner)
- Referrals: Customers who are considered “promoters” spend at least 21% more each year are 8% less likely to churn and account for 80-90% of all referrals. (Thanx)
So how can your business increase customer retention? By keeping your customers happy! Here are six ways to boost customer happiness:
1. Develop a Customer Loyalty Program
Show your customers you appreciate their repeat purchases by creating a loyalty program. Whether it is a punch card, a tiered-reward system, or simply a discount, incentivizing consumers to come back for more is a great way to reward loyalty and keep your customers smiling.
2. Create Engaging Content
Who are your best consumers? Where do they live online and offline? How do they consume content? By creating personalized and targeted content for your audiences, your brand has a better chance of reaching and engaging with your customers. This in turn can lead to better relationships, staying top of mind, as well as more referrals. When your customers feel like you are speaking directly to them, in their comfort zone, it is more likely that brand recognition will turn into brand preference when it is time to purchase. Plus, providing helpful and relevant content directly to customers can help improve the way they do business.
3. Provide Exceptional Customer Support
Whether it’s answering a question about your product over the phone, meeting with a customer in person to deliver your product or service, or handling support after the sale, your team’s aim should always be to ‘wow’ your customers. By going above and beyond in every interaction, you have the ability to make every customer feel as though they are your most important asset and they’ll want to do business with your company again and again.
4. Give Them the VIP Treatment
Want to really win your customers over? Treat them as if they’re an integral part of your company. Offer special sales and promotions that are only for your most loyal customers. Ask them for feedback and show them that you value their opinions. Hold events that are personalized to them. The more they feel like an integral part of the team, the more loyal they’ll be to your brand.
5. Implement a Referral Program
One of the greatest benefits of customer loyalty is the word-of-mouth marketing it generates. Yet a shocking study by Texas Tech revealed that even though 83% of satisfied customers are willing to spread the word about their good experience, only 29% actually do. Why does such a large chasm exist? Mostly because many businesses are not asking or not rewarding for their referrals. For example, a free coffee would be a great reward for referring a new patron to a local bakery, but that same reward would not hold the same value for referring a new client to a law firm. Make the ask for referrals at a time that your customer is the happiest and incentivize with a reward they value in order to see an increase in referred business.
5. Create Relationships With Your Customers
People who are loyal to a brand usually are because they have a personal connection with its products, services, and/or culture. Regardless of the size of your organization, you can easily demonstrate to your customers that there are real people behind your brand by showing your personality through email, social media, and personal interactions.
Loyal customers are the lifeblood of any successful business and most executives state the best source of new business is a referral from a happy customer. By implementing these six steps, your business will be on its way to improving customer retention and reaping all the amazing benefits that come along with it.