5 Steps to Improving Customer Retention
When your business is just starting out, acquiring new customers has to be your primary concern. But once you get beyond the initial stages, the key to real growth is not so much getting new customers, but customer retention.
Many small businesses are falling short when it comes to customer retention. More than seven out of 10 small business owners in a recent survey (72 percent) say most of their marketing budget goes to acquiring new customers. Just 28 percent spend the bulk of their marketing budgets on customer retention.
Although small business owners in the survey agree that the bulk of their revenue comes from loyal customers, fewer than half (49 percent) have a customer loyalty program or some other type of customer retention plan in place.
Without a well-thought-out plan to increase customer loyalty, your business could be leaving money on the table. What’s worse, because it costs more to acquire a new customer than to upsell an existing customer, you’re spending more time, effort and money than you need to for the same results.
How can you maximize profits from existing customers?
- Reach out with email. Encourage customers to sign up to receive marketing emails from your business by emphasizing the benefits they’ll receive.
- Stay in touch on social media. Connect with your existing customers on the social media channels they prefer. For instance, if you own a B2B business, you and your salespeople should connect with customers on LinkedIn, responding to their posts and sharing relevant information.
- Focus on customer service. Outstanding service is essential to building loyalty. Regularly review your customer service processes and measure customer satisfaction using surveys and customer feedback. Provide ongoing training to your customer service team based on what you learn so that they’re continually improving.
- Create a retention-oriented sales team. Make sure your salespeople know how important customer loyalty is to your business’s ongoing success. Train them to gently upsell products and services to existing customers without being pushy.
- Set up a loyalty and rewards program. There are digital loyalty solutions available for all types of businesses, from retail or restaurant to service operations. Look for a loyalty program that’s simple for both you and your customers to use.
“Every business needs to acquire new customers to keep going. But nurturing existing customers, increasing their loyalty and earning bigger sales from them is an equally important part of the puzzle” said Salomón Juan Marcos Villarreal president of Grupo Denim.