Companies often focus so much effort on winning new business that retaining customers sometimes doesn’t command the attention it should. That’s a mistake.
Research shows that retaining customers can have a huge financial impact on a business. A study by global management consultant Bain and Company estimated that simply increasing customer retention by 5% can boost profitability by 75%.
Here are five fundamental steps every company should take to build and maintain customer loyalty:
Know who your buyer is
In the era of Big Data, few businesses have an excuse for not knowing their customers. And today’s customers expect you to know them – especially if they are already on your books.
Understanding who you are selling to involves more than just having the right name, address and other basic information. It means looking at their past purchases and analysing them, taking into account service histories and using interactions across the many available digital touchpoints to capture accurate data on their needs, preferences, personal and professional circumstances, purchasing patterns and experiences as customers.
This enables you to develop the strategic and tactical approaches that work for each.
Use the right tools
Technology plays a big role in capturing and using customer data to better understand your buyers and provide them with the positive, informed experience they want – and, increasingly, are coming to expect. Today’s customers want relevant, tailored and well-timed communications and you need both the information and the mechanisms to provide that.
Marketing automation software, customer relationship management (CRM) solutions and social media management tools are some of the platforms companies need to more effectively interact with customers on an ongoing basis.
Match the message to the customer
Segment your data so that different customer groups are getting messages and offers that work for them. It is easy to sour a customer relationship early on by bombarding a new buyer with unsuitable follow-up communications.
Different customers have different characteristics and needs. The value of different types of customers can also vary. Segment them by looking at factors such as their lifetime value, their responsiveness, their loyalty (have they been long-time and regular buyers?), and their similarity to other good customers. Also, use this information to determine how much to invest in marketing to or servicing each.
Foster positive customer experiences
To really retain more customers, you need to succeed right from the first point of contact all the way through the entire relationship. That means every customer-facing employee – whether in marketing, sales, shipping, customer service or accounts – needs to be professional and exceed expectations with each client interaction.
Ensuring a good customer experience involves empowering and motivating staff to use all available information to address both the immediate and long-term needs of each customer. It also requires buy-in and training across an organisation.
The end result will not only be satisfied, loyal individual customers, but an excellent company reputation and social media referrals, as you create brand advocates who can spread the word to hundreds or even thousands of potential new buyers.
Take advantage of upsell and cross-sell opportunities
When it comes time to devise new campaigns and launch new products and services, make sure to include and effectively target your one set of proven buyers: your existing customers. You already know more about them and their needs than any prospects you hope to win, you already have a relationship with them, and you’ve built their trust.
You should also track all interactions they have with your business. What content are they reading? What web pages are they checking out? What queries are they making? What products and services are they currently getting from you? If you are gathering the right customer information, you should be able to determine when they are ready to upgrade or extend their relationship with you.
In the end, strengthening existing customer relationships ensures your revenue stream, builds profitability and provides a bedrock for future business growth.
Like what you read? We’ve got more great hacks from experts including Xero and GoCardless in our latest ebook, as well as time saving tips and magical marketing ideas from growing businesses, who know what it’s like.