As you prepare to hit “refresh” on your marketing strategy for the year ahead, remember, “out with the old, in with the new” does not apply to everything. Acquiring new customers is vital to future growth. But acquisition should not come at the expense of existing customers.
Loyal Customers Lead To Growth
Keeping your current customers happy and making repeat purchases is key to growth for almost every business. Data shows customers who are devoted to your business and brand are better for your bottom line.
• According to Marketing Metrics, the probability of selling to an existing customer is up to 14 times higher than the probability of selling to a new customer.
• Bain & Company and Harvard Business School report that “increasing customer retention rates by 5% increases profits by 25% to 95%.“
• Research found that existing customers are 50% more likely to try new products and spend 31% more, on average, compared to new customers.
• New customer acquisition costs have increased by almost 50% in the past five years.
Existing Customers Become Brand Advocates
In addition to the fact that loyal customers are more likely to buy from a brand they trust, they are also more likely to advocate for your company. And with social media being a driving force in referrals, anyone with a computer, tablet or mobile phone can be a brand ambassador.
According to Temkin Group, 77% of customers would recommend a brand to a friend after a single positive experience. These “mini-marketers” can supplement your own marketing efforts and sales team to bring in new prospects, cutting out a few steps in the customer acquisition process. They provide something of value for a friend or colleague by passing along a valued referral, and you save time and money with the possibility of acquiring new customers. Win-win.
Your loyal customers are in a relationship with your brand, so don’t treat them like strangers.
Consider what mechanisms you have in place to capture valuable data about your customers’ purchases and purchase behavior. Then use that data to strengthen your relationship. Are they due for a service call? Send them reminders. Acknowledge milestones. Has it been six months or a year since they bought that big-ticket item? Check in to see if they are satisfied. Keep them updated about promotions or product updates.
Tailor your communications as much as possible. Personalized messages make customers feel valued, stand out in their inbox and contribute to brand loyalty. There are numerous studies that demonstrate the effectiveness of personalized communications, email in particular. According to research, adding personalization to subject lines can increase open rates by 26%.
Loyalty programs are another great way to create long-term relationships and boost sales. According to the 2018 Bond Brand Loyalty Report:
• 77% of consumers say they are likely to stay with a brand that has a loyalty program.
• 70% of consumers are more likely to recommend a brand with a good loyalty program.
• 63% of consumers say they’re prepared to modify their spending habits in order to maximize the benefits of a loyalty program.
Reward those who are loyal to your brand. Send out coupons and promotions, or create a point program. Feature member-only discounts or special sale preview hours that incentivize loyal customers to shop. Do keep in mind loyalty programs don’t need to be just about freebies. Find creative ways to let your loyal customers know you appreciate their devotion to your brand and give them a good reason to shop!
Show Them They Matter
Stay in touch. Don’t only reach out to customers with sales opportunities. If it’s been a while since you’ve heard from a customer, reach out just to say hello. A small touch, like an email or a birthday greeting, may not directly tie to a sale, but it will help keep your brand top of mind.
Chances are at one point you’ve received a survey in your inbox at the end of the year asking, “How did we do?” Customer surveys are great vehicles for feedback, but instead of asking how their experience was, how about asking how you can help make the coming year even better? Skip December and send something in January focusing on improving customers’ experience with your brand. What would they like to see from you in the coming year? What would keep them coming back to your product or service? Would they recommend your product or service to others? Their responses can help you focus your marketing efforts and your customers will feel valued.
Despite the overwhelming amount of data, few companies make customer retention a priority. Companies are missing out on the benefits of nurturing those existing relationships. As you begin to tackle 2020, remember to leverage your existing relationships to help achieve your growth goals.
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