Struggling to keep your customers after conversion? You’re not alone.
27% of business owners estimate that 11-20% of first-time customers don’t stick around. But why?
Retaining customers gets harder every day with increasing competition. There will always appear to be brands in your industry that are cheaper and faster.
But there is a light at the end of the tunnel. Customers are hungry for better shopping experiences. In a recent “Which?” survey, 94% of people said they were likely to continue buying from their favourite brands.
In this blog, you’ll learn the tricks and processes to increase customer loyalty and retention in the modern marketplace.
The Importance of Customer Retention
The truth is, retaining your customers is just as important (if not more) as converting them.
As Brain and Co. found , attracting new customers will cost your company 6-7 times more than keeping an existing customer, while a 5% increase in customer retention can increase a company’s profitability by a whopping 75%.
Here are the biggest reasons a solid customer retention strategy is integral to business growth:
Improved conversion rates - with trust already established, customers have the confidence needed in your offering and brand to buy from you again (that’s if you have a good retention strategy, as we’ll discuss in a moment).
Reduced marketing spend - you don’t need to spend as much time, effort and money to acquire new customers.
Better products and services - by listening to customer feedback (which we cover here), you can learn how to improve your offering and bottom line.
Boosted profits - according to Gartner , 80% of your company’s future revenue will come from just 20% of your existing customers. Why? It’s easier to up-sell and cross-sell to existing customers than new customers because they’re already interested in your offering.
Smart marketing activities for increased customer retention is key to achieving these benefits.
While it might be tempting to think, "I have a great product or service, surely customer retention will come naturally?" This is a big gamble in the long run. Eventually, your customers will find a brand that can offer them greater personalisation and value for their money if you sit back and do nothing.
But you’re not going to let that happen, are you? Now you know the importance of customer retention, let’s look at how you can continuously earn their loyalty.
New Marketing Activities to Delight Your Customers
To successfully increase your customer loyalty and retention, you need to shift your marketing focus from attracting to delighting. This requires changes to your marketing processes. But don’t worry, if you’ve already nailed your inbound marketing strategy, it’s familiar territory.
1. Slaying the Personalisation Game
Better customer experience should be one of your biggest priorities as these stats show:
- 86% of buyers will pay more for a better brand experience, but only 1% feel that vendors consistently meet expectations (Oracle)
- 54% of UK consumers feel more loyal to brands that show a deep understanding of their preferences and priorities (Wunderman )
- Customers who have had an unpleasant experience on a brand website are 88% less likely to return (Clicktale)
- 44% of consumers say that they will likely become repeat buyers after a personalised shopping experience with a particular company (Segment)
To deliver unrivalled personalisation, there are several marketing tactics you can employ. Let’s dig a bit deeper into these activities.
Data-Driven Content to Capture Customer Loyalty
This is where inbound marketing and CRM software shines. A platform like HubSpotgives you the power to mine valuable data on your existing customers seamlessly.
By analysing their ...
- shopping behaviours
- the type of content they consume
- the products or services they regularly look at
- the online channels they use the most
… you know how to create content that presses customers’ buttons and results in repeat purchases.
For example, if your data tells you that an existing customer has visited a specific product page more than once in the last week, you can create a personalised offer (i.e. an email offering a discount code) to elicit another purchase.
Product recommendations are worth their weight in gold too. Just look at how Netflix uses them.
By providing tailored suggestions within the platform based on a users’ recent searches, they are much more likely to spend time digesting Netflix's offering than any other media-services provider. Because Netflix has made it incredibly easy for them to find TV shows or movies they’ll love.
Using a similar tactic, you can send customers recommendations using your CRM data for new products or services via their preferred online channel, such as email or texts.
The beauty of using a CRM is that you can automate these actions too.
63% of marketers plan to increase their marketing automation budget this year.
That’s because, with a super-intelligent inbound marketing software like Hubspot, you can automate the delivery of personalised content with ease.
First, you need to make sure it’s set up properly. Our guide, Using HubSpot Correctly: Maximising Your Account Potential, can help you achieve this (the information can be applied to other CRMs too).
With the right set up, customer actions will automatically trigger personalised content distribution. The result? With content that responds dynamically and on time to customers’ needs, they’ll feel like you care about them on a deeper level.
Execute data-driven and automated marketing and you’ll achieve hyper-personalised customer experiences. This is an incredibly important step in securing customer loyalty, but the work isn’t over yet.
2. Creating Customer Loyalty Programs
No matter your business, customer loyalty programs can boost your retention dramatically. It helps them build a strong emotional connection to your brand which, according to Forrester's CX , is a stronger driver of loyalty than factors like ‘ease’ and ‘effectiveness’.
It’s also what customers want. Jar Research shows that 55% of consumers are willing to pay more for a guaranteed good experience. Because there’s no better feeling than jumping the queue when boarding a plane or getting served a glass of bubbly on a long train journey, right?
What’s more, research showsthat 70% of consumers are more likely to recommend your brand if it has a good loyalty program. When you consider that 74% of consumers identify word-of-mouth as a key influencer in their purchasing decision, you realise how game-changing this is for success.
So What Does a Quality Customer Loyalty Program Look Like?
First, you need to decide how your loyalty program is going to work. You have a few options:
- Charge an annual fee - ask customers to pay a membership fee upfront (think Amazon Prime). That way you benefit from extra revenue and repeat purchases. But this will only work if your target market is the type who’s willing to spend extra cash.
- Introduce a points system - where every pound spent earns the customer a specific number of points. These points can then be used on discounts and promotions. Check out Liberty London’s points systems as an example.
- Reward your top customers - implement tiered rewards based on how much a customer spends. E.g. if they spend £300, they get a free ticket to a high-profile event, £1000, a luxury birthday gift and so on. A great example is Sky’s VIP Loyalty program.
- Tiered rewards - They have Silver, Gold and Platinum levels that come with their own exclusive perks, from cinema tickets to fun experiences and better tech.
The next step is working out the type of rewards you’d like to offer. Obviously, this will depend on your budget, but here are a few ideas to point you in the right direction:
- Early access to new products - such as beta releases to new software. This is also a great way to get feedback before the full release to help you refine your product.
- Exclusive perks - like free shipping (hello again, Amazon Prime), VIP-only offers, bigger discounts during a sale or exclusive competitions.
- “Freebies” in customers’ orders - VIP customers get a free gift when they make a purchase, such as a gift card or a product sample.
Make every effort to delight your top customers and they’ll reward you with brand loyalty. And ensuring that they continually get perks for their commitment will help you retain them over the long-term.
3. Supercharging Customer Satisfaction
The easiest and most effective way to impress your customers? It starts with surveys. Obtaining customer feedback regularly empowers you to:
- Spot service gaps.
- Personalise your offerings.
- Nurture unhappy customers.
- Cultivate brand ambassadors.
- Solve new problems swiftly.
Making mistakes isn’t what loses customers, failing to learn from them is. The data you gain from your surveys will help you continually improve your service and reassure customers that you are committed to fulfilling their needs. This is essential in increasing customer loyalty and retention.
How and Where you Present Your Survey Matters
For example, Survey Monkey found that if a respondent begins answering a survey, there is a sharp increase in drop-off rate that occurs with each additional question up to 15 questions. Proof that short and sweet surveys are more likely to net you quality feedback from customers. And mentioning that it’s a “short survey” in your copy will help you drive those click-throughs.
It was also found that in 2017, one-third of all surveys were carried out on mobile devices. This demonstrates the importance of optimising feedback forms for mobile.
You could consider using polls to gain customer feedback too. They can be executed through social media channels like Facebook and Twitter - platforms that offer you stats on the results. And since they are much quicker to complete, you’re more likely to get tangible data you can use (although it won’t be as personalised as the information you get from questionnaires).
A lot of CRMs give you the ability to create and send out surveys. Check out Hubspot’s guide for more tips.
4. Solving Customer Problems Superman Style
If you think getting back to an existing customer within the hour will give you a competitive edge, think again.
According to HubSpot , 90% of customers rate an "immediate" response as important or very important when they have a customer service question. 60% of customers define "immediate" as 10 minutes or less.
There are lots of ways you can speed up resolutions to customer problems. For example, a quality CRM should be able to notify your support agents as soon as a customer complaint or question comes in.
It might also allow you to prioritise specific problems or customers to ensure those who need your help the most are contacted first. This is also useful when you want to give VIP customers that extra level of care.
Plus, self-service is an invaluable tool to increase customer loyalty and retention. Giving your customers the ability to solve issues on their own means:
- Your customer support team have more time to handle complex problems, saving the business time and money.
- Customers get fast fixes or answers, increasing their happiness.
Some self-service platforms can also be linked up with Google Analytics, (like this one from Zoho ) so you can observe your customers' behaviour to find out how effective your self-service option is.
Finally, omnichannel customer support is your secret weapon in improving customer service. It creates a cohesive CX by integrating multiple channels - such as text, social, email and instant messaging - so that the customer can switch between each channel and still experience quality service within a single system.
Also, no more passing a customer from pillar to post. Your support agents gain a helicopter view of a customer’s interactions, giving them licence to answer queries and solve problems at lightning speeds.
Customer Retention Marketing Pays for Itself
Remember: a 5% increase in customer retention can increase a company’s profitability by 75%. This just goes to show the importance of customer retention.
Use what you’ve learnt in this guide to be a brand that stands out for all the right reasons. To recap, increasing customer loyalty and retention can be achieved by:
- Slaying the personalisation game
- Creating customer loyalty programs
- Supercharging customer satisfaction
- Solving customer problems superman style
All of these points are much easier to accomplish when you have quality marketing tech. Are you in need of a powerful CRM? You should read our guide, Why Your Boss (& Business) Would Love HubSpot & Inbound Marketing.