Date posted: February 1, 2017
While you’re out there looking for new customers, here’s a reminder that keeping your current ones is pretty important. Here’s what an article in the Harvard Business Review had to say:
Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. It makes sense: you don’t have to spend time and resources going out and finding a new client — you just have to keep the one you have happy. If you’re not convinced that retaining customers is so valuable, consider research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) that shows increasing customer retention rates by 5% increases profits by 25% to 95%.
Those are some pretty arresting figures, which were used as a jump-off point for a recent column by Pam Neely in the Act-On blog that put forth a baker’s dozen of best practices to keep customers loyal. Of those, we selected the ten we thought were most cogent to those who subscribe to this blog:
- Coordinate across departments
Existing customers interact with several departments in your company. They need a coordinated, consistently positive experience if you want them to be loyal to you. Because of this, it’s critical your different departments are willing to bridge any gaps between the different services they offer.
- Measure what matters
Neely points to three metrics to track for customer loyalty: one, repeat customer rate; two, customer lifetime value; and three, net promoter score (how likely a customer is to recommend you to a friend or colleague).
- Be loyal to your customers
According to research from KiteWheel,“73% of consumers feel loyalty programs ‘should be a way for brands to show how loyal they are to them as a customer.’ However marketing executives disagree; 66% believe loyalty programs are still a way for consumers to show how loyal they are to their business.“ Look at loyalty from the customer perspective as well.
- Be clear about what you expect from a loyalty program
Define which specific actions you want your program to shape. Consider picking just one thing you’d want to change about your customers’ behavior.
- Let people help themselves
Different people have different learning styles. Different ways they take in information. Some are video enthusiasts (see our earlier post). Others prefer text. Keep this in mind as you consider budgeting for an online help center. Not everyone will want to use it; but for those that do, they’ll expect it to be good.
- Let people get help, too
Not everyone wants to figure things out with an online help center. Some of your customers want to be able to dial a number and talk to someone. Give them this option.
- Embrace complaints
Embrace them. Angry customers are a treasure if you understand them correctly, and if you can engage them correctly. View this as an opportunity, not a threat. For more ideas on how to do this, read Hug Your Haters by Jay Baer.
- Be better than what customers expect
Good surprises can build up an enormous amount of goodwill. They appeal to our emotions more than our pocketbooks. But keep in mind it can work another way. Like if your company makes a pretty big mistake, and then offers a cheap apology or money back. Customers can take this as an outright insult, and it can do almost more harm to their loyalty than if you did nothing at all.
- Create content for existing clients
Think post-sales as well as sales. Upselling, cross-selling, and retention should be factored in to how you calculate the return on your content marketing. You might also want to create content that’s only available to existing clients. Market research could be particularly enticing.
- Back off on the selling in content
Be useful, or entertaining, or both. That’s the sort of content people will come back to. They get enough of advertising (overt and covert) everywhere else.