Manage your customer retention – don’t let your customers exit
Manage customer retention and stop your customers exiting.
New business doesn’t always mean new customers. The usual statistic rolled out is it costs you 5x less to retain a customer rather than acquire a new customer. So what do you do about retaining your existing customers, do you manage customer retention?
Do you have a plan to stop your customers leaving? After all, when they do leave it’s such a missed opportunity.
You’ve done all that hard work making sure your PPC campaigns are working efficiently.
Making sure that your conversion processes are hyper-effective.
That you’ve processed the order on time and the order has been delivered.
And of course, making sure your customer service is top notch.
Manage your ongoing customer referendum
But what if your customers don’t complain?
What if they just drift away.
Unfortunately in most cases, you won’t have a referendum or a specialist period of conscious uncoupling. Your customer won’t tell you they are off to spend their hard earned money somewhere else. They’ll just go somewhere else.
You see, unless you are working to a legal contract, or you are the only place in the world that people can buy ‘your thing’. Then your relationship with your customers isn’t exclusive. They can see other people, and they will.
If you are selling women’s clothing online, they can buy from other women’s clothing outlets.
If you are a hotel in a city, other hotels in that city are available.
People are creatures of habit, if you can match your marketing activities based around the behaviour of your customers, then you give yourself a much better chance of keeping their valuable custom.
When you manage customer retention, you are managing your future business growth.
Manage Customer Retention and spend your marketing money in the right places
How much do you spend on finding new customers?
I’m sure you’ll be keeping a close eye on the cost of acquiring a new customer, to make sure each new sign up isn’t a pyrrhic victory over your competitors.
From an acquisition perspective, perhaps you’ll be measuring average cost per customer against average basket value? Perhaps you go deeper. It’s easy to build a hugely complicated network of reports, facts and figures to keep your acquisition spend optimised and effective.
But how much extra value do you get from all of that extra work and acquisition channel analysis?
You see new business doesn’t always mean new customers. You’ve already know who your customers are, and what they’ve bought. That’s a huge competitive advantage for you to exploit.
A lack of marketing focus on existing customers is why we often see a drop off in repeat purchase of between 80% – 60% after people have made a single purchase?
Are you measuring the total value of each customer?
A key question we help clients to understand is – when a customer becomes a customer? When is the magic time when a customer is more likely to buy from you again, than not buy from you again.
Obviously that is very different for different businesses based on what they offer – but the point is just because someone has bought from you once – that doesn’t mean that they automatically come back. Gaining an understanding and measuring customer lifetime value can be a real eye opener.
Manage customer retention with a targeted marketing programme
Marketing – especially digital marketing – tends to be geared towards customer acquisition rather than customer retention.
In our experience, putting even a little more effort into customer retention your existing customers can have a huge payoff.
You already know who they are.
What they’ve bought and when they bought it.
How they bought it
And since you already have their contact details it costs you far-far less to communicate to them.
That also means you are in control of the process. You aren’t relying on Google or Facebook algorithms, and you be spending far less to communicate with your audience.
The stat that is usually rolled out at this point is that getting a sale from an existing customer costs 4 times less than acquiring a new customer.
I’ll add to that stat by adding using data driven marketing automation to existing customers you’ll also get a 4 times increase in audience engagement.
If you want to sell more stuff, and unlock growth, a targeted marketing plan to your existing customers is a great start. Manage customer retention and take control of your customer journey.
If you need help on getting started, get in touch. We’ve got the skills and experience to help quickly close that customer exit door and stimulate growth quickly.
Do you want help to keep your customers?
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Also published on Medium.