The Value of Retention: How to Make The Most of Your Existing Customers
Lead generation is often valued over maintaining, or nurturing, existing customers. But customer retention can be just as valuable, if not more valuable, than generating net new leads, particularly if you have a recurring revenue model or multiple compatible products and services. Improving customer retention rates boosts your customer lifetime value as well as your overall revenue, often at a far lower cost than generating new customers. In addition, loyal customers may be more inclined to branch out and spend money on additional products and services within your company, as well as to spread the word of your brand within their own circles. So, how do you go about maximizing the value of existing customers?
Upsell or cross-sell additional products and services
What products and services do you offer that are underutilized by current customers? Develop case studies, white papers, or webinars to outline the benefits of those products and services and get them in front of relevant customers through email and other marketing channels. If applicable, demonstrate how your products and services can work together to improve outcomes for their business. Your customers may not be aware of the additional value you can provide to them, and since they had enough trust and comfort to purchase your products and services before, they may be more likely to do so again.
Request customer feedback
There is no cookie-cutter solution for how to best communicate with your customers. You can certainly gain valuable insights from observing what works and what doesn’t for other companies, but every business is different and no two target audiences are exactly the same. So how do you determine what works best for your customers? It’s simple: you ask. Keep your surveys short and sweet and ensure customers understand the role of these surveys as well as find them relevant (e.g. “How would you rate your experience from 1-10?” within a week after a purchase is made or “Did you find the case study on [topic] to be relevant?” within a few weeks of sending it out). Consider asking at least one open-ended question that can provide you with more context (e.g. “Why?” or “How can we improve?”) and potentially using an incentive for completing the survey. Finally, perhaps most importantly, be sure to use the feedback. Set aside sufficient time to review and act on the valuable results you took the time to request and your customers took the time to provide.
Stay top of mind without inundating your customers
Keep up regular communication with your customers, perhaps deploying a quarterly or monthly newsletter and staying active on your social media channels. It is ok to push out more frequent communication when it comes to valuable updates or content such as events you’re promoting or relevant assets you’ve developed that customers may find useful, but avoid saying something just to say something. Provide value and variety in your communication and be respectful of your customers’ time. How do you determine a communication strategy that suits your business and your customers? Consider utilizing surveys, in the manner discussed above, to ask how often customers would like to hear from you and/or what particular information they are interested in hearing about.
Demonstrate your value
Find ways to demonstrate your value to your customers. Offer valuable content such as white papers, case studies, videos, and webinars. Host interesting events and tailor communications and other customer-touchpoints to individuals or groups of individuals to show that you’re paying attention to their specific wants and needs. Finally, consider creating touchpoints with the sole purpose of showing your customers what you’ve done for them recently. Present unique monthly, quarterly, and/or yearly data-backed reports on the results you have generated or helped to generate for your customers. Tailor reports to your particular set of customers and their business goals (e.g. a marketing or sales firm may choose to demonstrate how many leads they helped their customers generate, or a retailer can outline how much money their customers saved on various sales since they started shopping with their company). Find something to report on that your customers value, and back it up with numbers and explanations as needed. If there are negative results, consider laying out a proposed solution. This will show customers that you care and that you are dedicated to keeping them happy.
Incentivize and reward customer loyalty. You can be selective, and even creative, when it comes to determining how you define loyalty and what benefits you provide, but be sure to strongly consider implementing something to reward your most consistent, and likely happiest, customers. A referral program is one way to do so – incentivize customer referrals with discounts, giveaways, or other perks. Customer referrals are highly valuable for a number of reasons. Perhaps most importantly, you’re taking the effort required to generate a lead or a sale away from your own resources and putting it into the hands of your customers. In addition to keeping your best customers engaged, you’re also generating net new customers that are hearing positive reviews on your brand from a friend or acquaintance, who may have similar interests or needs, which may in turn make them more likely to become loyal customers themselves. Implementing separate loyalty programs presents another great opportunity to solidify the relationship between your brand and your best customers. Set a standard your customers need to meet to enter into the loyalty program, and incentivize the program by offering discounts, giveaways, or other perks. Make the program as selective as you want and the rewards as small or large as you see fit. You can also consider utilizing a tiered approach (e.g. the more you spend, the more benefits you receive).
Do the little things
Sometimes, it’s the little things that count. Wish your customers well around the holidays, just to show them you’re still thinking of them. Consider offering a holiday perk to go along with the sentiment – it doesn’t have to be anything major, a little goes a long way when it comes to humanizing your brand and endearing yourself to existing customers.
Test your retention strategies
Your business, industry landscape, and particular set of customers are not only unique to your company, they are also constantly evolving. Test every piece of a strategy or tactic that you realistically can with the tools and resources you have. A/B test email subject lines, request customer feedback, and report on and meticulously analyze results to determine the optimal path forward. Don’t be afraid to try something new if your initial strategy just isn’t working. Utilize your past learnings, but avoid assuming that just because a given strategy worked before, it will work again. Carefully analyze all metrics, results, and projections you can access for different strategies and use them to measure risk when determining your investment strategy, in terms of both time and money.