It’s often said that recruiting new customers costs five times more than retaining the ones you already have, but it’s understood that recruiting is easier than retaining. The truth is that the most successful companies have loyal returning customers who patron their business time and time again. If you don’t have that customer base, it’s time to build it – but first, do you know where you’re going wrong on customer retention?
Why Should a Business Want to Retain Clients?
Aside from the fact that it’s cheaper to retain clients than it is to recruit them, it’s easier too. Working with customers repeatedly ensures they understand and acknowledge your brand’s strengths and ways of working and usually have a good idea of existing products and services.
What’s more, it’s been proven that loyal customers have an increased Customer Lifetime Value (CLV) to a business; so they buy more, buy more often, and buy extras. All stack up on your business’s bottom line. In the best-case scenario, loyal customers feel passionately enough about a company to recommend them to others, and at the very least, they often spark a conversation from having the product or packaging in view or earshot of other people.
Retention Failure #1: Customers can’t Differentiate the Business from Competitors
A strong USP (Unique Selling Point) should differentiate your business from your competitors because if it doesn’t, there’s likely to be an element of customers switching back and forth. Although this often means you get a ‘turn’ with a customer, so do your competitors: so it benefits their business as much as it does yours.
Ensuring that what makes your brand different from any other is communicated efficiently and clearly to customers will help increase interest and loyalty for those customers for whom you’re a good fit, whilst establishing a niche for those who haven’t yet purchased with/from the company. Take the time to make sure that customer’s perception of your brand line up with your vision!
Retention Failure #2: Your Business’ Online Reputation is Declining
What consumers think of brands, products and services are shared more online now than ever, and many fear gaining a bad online reputation.
Whilst no business can ever have full control over what is said about them online (and quite rightly so), some management of online reputation can be maintained.
Working with, rather than against, consumers online can have huge benefits for both the customer and the company: increasing trustworthiness and positive perception for the former whilst integrating continual improvement and brand development direction for the latter. Displaying authenticity and openness to improvement is attractive to consumers and allows them to feel as though they’re inputting meaningfully to a business at the same time.
Retention Failure #3: There’s no Reward for Loyalty
If there’s no incentive for a customer to return to your firm for repeat purchases, they’re more likely to go elsewhere. While launching a traditional loyalty scheme isn’t appropriate for every business, there’s plenty of varied successful programmes encouraging repeat custom that are a little out-of-the-ordinary.
We’ve all heard of the Tesco Clubcard and the Boots Advantage Card, but what about taking things one step further… or sideways? The Ocado Saving Pass is a subscription for discounts, Heinz distributes coupons for social media shares and Costa offers sporadic surprise deals for those who download their app – including the wildly popular shock 50p-a-drink offer for the week the hospitality sector re-opened in the UK!
Retention Failure #4: Nothing Changes
‘Perfect’ customer experiences are few and far between, and even with a positive experience, there’s still likely some room for improvement. To best demonstrate that your business is moving forward and always for the better, collecting regular customer feedback and then explaining the actions you’re taking from it, will help prove movement.
If customer niggles and nags can be resolved then, great, but if you’re able to move onto the ‘nice-to-have’ features customers dream of, even better. The ability to surprise and delight customers whilst letting them feel empowered and involved in the business is truly special and will engage them to return and purchase again.
If you take one just piece of advice on bettering customer retention rates, it’s this: put the customer at the heart of everything you do as a business. A dream consumer that’s a perfect fit may never walk through the door, so instead, make it as easy and as intuitive as possible for the ‘right’ customer to purchase from and work with you. They’ll appreciate the flexible focus, and you’ll appreciate the added custom – it’s a win-win!