Customer retention is key
Retaining current customers is typically more profitable than obtaining new customers. An Invesp study found that the probability of selling to an existing customer is 60% to 70%, while the probability of selling to a new prospect is 5% to 20%. Existing customers are 50% more likely to try new products and spend 31% more when compared with new customers. Consider these three steps to focus on maintaining your customer loyalty:
Step #1: Create a positive online experience.
Focusing on creating positive online experiences can greatly improve customer loyalty. About 89% of companies see customer experience as a key factor in driving customer loyalty.1
There are a variety of engagement opportunities between your business and customers, such as the online ordering process, receipt of goods or services and post-purchase customer service. Every direct or indirect interaction a customer has with your business can impact the customer’s experience. Here are a few ways you can improve you customer’s experience:
a. Keeping employees engaged — It’s well documented that higher employee engagement leads to more positive customer experiences. Employees interact with your customers regularly. Happy employees lead to positive customer interactions.
Forbes outlines several ways to keep virtual employees happy, including setting clear expectations, making time for phone calls or videoconferencing and more.
b. Gathering employee feedback — This not only can improve the engagement of your employees, it will also allow you to capture valuable insights into how you can improve the customer experience. You can also use digital tools such as online surveys to capture customer feedback. Email and social media can be used as well to collect customers’ opinions; more on that below.
c. Providing great customer service — If a customer is unhappy with your product or service, use digital communication tools or phone calls to remedy the situation.
Step #2: Email and social media marketing.
These digital tactics are the most effective for customer retention.1 Both platforms can be used to show appreciation and stay engaged with customers — and collect valuable customer insights for your business.
a. Email — Use email to keep your customers engaged with your brand. Content and frequency will vary depending on your industry and type of business. Beyond providing your customers with information on sales or new products and services, you may also consider sending emails to welcome new customers to your brand, celebrate birthdays, share exclusive content and more.
You can also use emails to gather customer feedback. Send surveys, or simply encourage a customer to reply to your email with feedback on a receipt purchase.
Before sending emails to customers, make sure you’re familiar with current email marketing laws and regulations.
b. Social media — This is a great way to create awareness around your business, but it can also be a powerful tool for keeping current customers.
Social Media Examiner notes that listening to and engaging with customers online is a great way to improve loyalty. Make it a standard process for your business to take time for social listening and monitoring of customer feedback about your business. This also creates a great opportunity to engage with customers on digital platforms by thanking them for their feedback. And you can also share customers’ posts or positive reviews about your product or service on your owned social media channels.
Social listening also allows you to gather indirect feedback from customers. Pay close attention to reviews and critical feedback, as these can be great insights into pain points that customers experience when interacting with your business.
Step #3: Develop a loyalty program.
A loyalty or rewards program creates incentives that encourage customers to buy more from your business. According to Bain & Company, a leading consulting firm, there are five characteristics of a strong rewards program:
- Informed offerings reward customers based on their unique value to your business.
- Customer targeting creates personalized offers based on location, frequency or other consumer behavior factors.
- Exclusive experiences add services or features that customers find valuable.
- Ease of use makes the rewards program effortless to join and use.
- The ability to collect feedback allows you to measure customers’ perceptions and fix problems.
If you create a loyalty program for your business, consider what type of program will work best for your business in an online environment. For inspiration, pros and cons of the various types of rewards programs, and implementation tips, check out HubSpot’s guide to building a customer loyalty program.
Building your business for the future
When your business is faced with challenging times such as the coronavirus pandemic, taking steps to maintain customer loyalty can help protect you, your employees and your business for the future. Get in touch with a Nationwide agent or get a business insurance quote today