Did you know that it is seven times as expensive to acquire a new customer than it is for you to retain an existing one? Yet, companies everywhere focus more on acquisition than they do on retention.
What’s more, 63% of businesses feel that customer acquisition is a more important goal.
So, even though it’s more cost effective to improve customer retention, companies tend to throw marketing dollars at courting new business.
In this article, we encourage you not to neglect your best business prospects – these are your current customers. Create a strategy for customer retention to watch your profits soar.
Today, we look at how to improve customer retention with these five tools. First, let’s look at customer retention:
What is Customer Retention?
Studies show that retaining customers is better for your bottom line than working hard to acquire new ones. But, just what does customer retention mean?
Customer retention is the process you go through to encourage your current customers’ loyalty. Customer retention strategies work together to encourage your repeat business.
Consider this definition by Impact Learning Systems:
By definition, customer retention is the activity a company undertakes to prevent customers from defecting to alternative companies. Successful customer retention starts with the first contact and continues throughout the entire lifetime of the relationship.
Since customer retention is one of the most powerful ways to grow your business, we’re here to tell you that it is doable. The best part about customer retention is that you already have a relationship with these customers because they’ve already made at least one purchase from you.
They know your business and a little about at least one of your products. Now, it’s up to you to convince them to move forward with your business again and again. To help you do that, here’s how to improve customer retention with these five tools.
#1: Build Relationships
The most important part of your customer retention strategy is relationship building. Once your customer makes the first purchase, it’s time to personalize the message.
This allows you to tailor information to each customer’s needs.
For example, let’s say you purchase a pair of jeans on an eCommerce site. That company may then send you an email with product recommendations that might go with your new pair of jeans.
Alternatively, you might sell vacuum cleaners online. You could continue to build the relationship by offering emails that include cleaning tips and product recommendations on vacuum cleaner bags.