We’ve all heard the old song: make new friends but keep the old, one is silver and the other gold. The same philosophy holds true for business customers. It’s great to attract new customers; they mean new sales, new contracts, and new opportunities for your business to grow. But it’s not enough — for your company to be successful, you absolutely need to retain the customers you have.
The marketing plan of most businesses includes a significant customer acquisition strategy, and it’s easy to understand why: its effectiveness is easy to measure and easy to manage. However, keeping the customers you already have is paramount to success, and your business’s marketing plan should have a heavy focus on customer retention. Whether you sell products or provide services, you don’t want your customers turning to one of your competitors.
Why it’s Important
According to digital marketing company Invesp, acquiring a new customer costs five times more, in marketing and other costs, than retaining a current customer. What’s more, second time customers and repeat customers tend to develop loyalties toward companies they frequently buy from. The more they turn to you for what they need, the more loyal they become, and the more they’ll advocate for your business with positive word of mouth advertising.
Finally, and perhaps most significantly, returning customers will, on average, spend more than first time customers — a lot more. According to business.com, returning customers spend 67% more than new customers. Once that level of trust and loyalty is established, repeat customers will keep coming back.
Retention Strategies
How can you turn one-time customers into returning customers and, eventually, loyal repeat customers? Offers like discounts and customer loyalty programs can go a long way in bringing new customers back. A quick email reminder or text message to a customer who made their only purchase a few weeks or months ago can also be helpful; sometimes, they just need to remember that you exist. Targeted marketing campaigns toward one-time customers can also be helpful, especially if they include something just for returning customers, like a flash sale or a first look at new items.
Also, you’ll want to figure out why one-time customers go elsewhere after their first purchase. Did they receive poor service? Were they not satisfied with your product? Perhaps your introductory pricing was too low, and the sticker shock on their next visit was enough to send them packing? Uncovering this information (usually by asking one-time customers you haven’t heard from in a while) can be incredibly helpful in your efforts.
Most of all, though, giving all of your customers a positive experience will go a long way in bringing them back for repeat business. As you probably know from your own experience as a consumer, customers have no patience for bad business interactions. And, it’s not only the experience they have while they’re buying or using your product. It’s everything: how your website works, how often you send marketing emails, how responsive you are on social media, and the actual transaction itself. Positive emotional associations with your company lead to customer loyalty. Negative associations will push customers away.
Ultimately, customers have lots of choices. If you can persuade them to choose you, they’ll keep coming back, and your business will continue to grow as a result.