Loyal clients are the backbone of a thriving business. If you focus on engaging new leads and ignore existing customers, you will lose out on profit. Let’s let the numbers do the talking.
Research says that increasing customer retention by 5% can increase profits by as much as 25% to 95%. While acquiring new customers is anywhere from 5 to 25 times more expensive than retaining an existing customer.
Those numbers are clear. Customer retention is important.
The logic is simple: the more loyal customers you have, the less you spend converting new customers.
So, the first goal on your priority list should be to find a way to lower the number of customers you are losing at every funnel stage.
If you figure out how to keep customers in your funnels, the next step is to encourage them to become “loyal customers.” To consider a customer loyal, they need to make at least two regular purchases.
So how do you do this? What is the strategy?
Invest in loyalty and make your existing customers a priority.
An investment is useless without ways to measure its success or failure. You should heavily consider your data before taking any action.
Marketers often use a wide range of marketing automation tools and methods to quantify and verify loyal customers. However, success is usually more about gently capturing the attention of your loyal audience, rather than just paying for the right tool.
Every merchant can find avenues to evoke excitement in their audience that encourages them to come back to their store.
Here is a list of 5 ideas and practical tips to get you started in your own store!
1. Loyalty Program
One out of every two retailers in the world has a loyalty program.
With that being said, there is an important detail we should discuss. All of your customers will never be 100% satisfied with their purchase. It is vital that you understand that a satisfied customer is not necessarily a loyal customer, and a loyal customer may not be entirely satisfied.
Loyalty is when a client intentionally buys from your brand over and over again. Providing these customers with a stable positive experience can be very valuable. Building a reward-driven relationship is the secret to keeping loyal customers satisfied.
Starbucks' loyalty program is one of the best examples. Their visitor receives a bonus for each order. In addition to this, customers also receive individual bonuses (free drinks or a gold card) for using their mobile app.
You should try to find ways to reward your customers in a way that gives back to them for their purchases as well as things like social media engagement.
Practical Tip: Think through your loyalty program strategy, create a questionnaire for your existing customers, and ask them what they love most about your services. Make their review a trampoline for your loyalty program messaging.
2. Email Marketing
Email marketing is one of the most prominent tools for customer engagement and retention. It is also a good channel to promote your products directly to specific customers.
But there are also risks. A poorly executed email campaign can lead to customer frustration. For example, we know that 1 in 2 emails are opened via a smartphone. If your email is not optimized for mobile devices, there is a high chance that your customer will unsubscribe from your mailing list.
Practical Tip: Quality is the cornerstone of a successful email marketing campaign. Bring more personalization, write powerful Call-to-Actions, and use a cross-platform layout for your emails.
3. Personalization Practices
A retention strategy is impossible to implement without data about your customers. Collecting and analyzing their information is crucial for custom personalization tools. According to research, this data can help you:
- drive impulse purchases
- increase revenue growth
- decrease return rates
- increase your number of loyal customers
The secret of personalization hides in the psychology of customer behavior. People love the feeling that the brand's policy is directed towards them or at least can be adjusted based on their needs.
Practical Tip: Mix your personalization practices with successful loyalty programs. Personal discounts, individual services, and any other expression of individualism can quickly show you how putting focused efforts into building brand loyalty are worth the investment.
4. Product Packaging
In the age of social media, user-generated content is a prominent marketing tactic. Brand hashtags or unboxing videos are great loyalty drivers, but ONLY when a delightful and pleasing experience is delivered by the custom packaging.
People want to interact with your brand both verbally and tactilely. Good product packaging does both. It becomes their first impression driven by gorgeous design and high-quality materials. We all know how important first impressions are.
The unboxing experience is the place where you first plant seeds of trust for loyal customers. If you can make your customers excited enough by the packaging they are proud of their purchase, they will likely post about it on social media before they even use it!
Merchants that find a way to do this will reap nothing but benefits.
Practical Tip: Your product packaging should:
- Be appealing to a well-researched customer persona
- Promote your unique value proposition
- Communicate your brand's identity
Don’t be afraid to test several variations to see what works best for your brand. Arka offers custom packaging solutions for any niche: whether you need custom shipping boxes, gift boxes or cosmetic boxes, they can help your business boost sales with a high-quality box.
5. Customer Support Service
A support team is always connected with marketing. It helps to keep your brand communication consistent at every digital marketing funnel stage. Some marketers say this is the cornerstone of building relationships with your clients.
Yet, there is another reason why customer support service is so important. One angry customer will tell nine more about their problem, according to research. And only 4% of disgruntled customers complained directly with the seller. And, wait for it... Only 5% of your clients want to share their positive experiences.
With all that said, one angry buyer will affect your revenue much more than one loyal customer.
Practical Tip: Invest in your customer support service by:
- updating your contact information
- answering people quickly
- always calling back
- tackling every negative review (don’t be afraid to even call the people who left you a negative review somewhere online)
- establish upsell practices inside your support team
Final Thoughts
As you can see, vying for a customer’s attention is a lot more than the right tools or using the right KPI metrics. It is about implementing different approaches smartly while tailoring them to your specific audience and their needs.
To sum things up, here is a quick rundown of some important points:
- Find a loyalty touchpoint with your customer. It can be sharing similar values, your mission to deliver the best customer service or at least a similar point of view on the environment.
- Teach and guide your clients. People love it when you give them recommendations and tips for a product they use.
- Search for new ways to say “thank you”. Show the client that you are thankful for their trust and cooperation. As an example, see how Mailchimp engages people by offering printed postcards. Such a pleasure in the digital era!
- Pack it excellently. Delightful packaging is a daring way to build tactile relationships with your customers from the first second. Use it!
- Work with influencers (wisely). Leverage the power of social proof but keep in mind that influencers are sometimes prone to scandals, spontaneous behavior, and other ways of drawing attention.
- Make it personal. Send a personalized letter, show them you care, come up with a special deal.
Nowadays, merchants have numerous ways to attract customers and encourage them into making that “right click”. No tool is a silver bullet, yet you can mix them to find the best solution.
Each of these approaches has its place. Take your time to define the ins and outs of each tool as you test them. Allow them to engage your next customer. It will not happen overnight, but it will likely happen a lot sooner than imagined if you use your data right.
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