Acquiring new customers is likely to be a common goal for companies and marketers in 2014. It’s certainly true that a steady influx of clients is important to sustaining a business. However, any company can gain new customers, generate more sales, and improve profits by focusing on existing customers with well-crafted customer retention programs.
Why Focus on Customer Retention?
- It’s can be as much as 70 percent less expensive to entice an existing customer to purchase again than to progress a new lead to the buying stage.
- Existing customers can serve as advocates for your company, products and services, providing valuable word-of-mouth advertising and personal recommendations.
- The well-known sales ratio that says 80 percent of sales come from 20 percent of customers will become more relevant to your ongoing business goals as you see the results from maintaining strong customer relationships.
- Small increases in customer retention can significantly boost profits. Improving customer retention rates by even as little as five percent can increase profits by 25 to almost 100 percent.
- Existing customers will likely buy more: Since existing customers already know what to expect from your company, they are likely to buy more when they purchase again. Some studies suggest a purchasing increase of 30 percent or more.
Customer Retention Strategies
Keep your customers engaged, interest, and loyal by:
- Offering rewards: Offer existing customers rewards such as discounts, free trials, small gifts, or make them feel special by simply thanking them with a greeting card.
- Creating an inviting, inclusive atmosphere: Make your existing customers feel like a valued part of your company by providing them ways to belong and feel included. Offer exclusive company information, grant early access to new products and services, or publish a customers-only newsletter or blog.
- Continuing to offer value: Freely educational material, resources, case studies, product suggestions and other valuable and useful material without asking for anything in return.
- Communicate relevantly and systematically: Use your customer database to segment groups of similar customers and target them regularly with timely offers and information. Check out our Resources page for an Introduction to Database Marketing.
Halo Programs provides customer retention solutions that can help you make the best of your existing customer base. Our Connections Customer Retention Program provides customized, branded, and timely communications with customers, all designed to communicate the most effective message at the most appropriate time.
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