Client retention is important to any business. Loyal customers are less price sensitive, more likely to convert, and apt to spend more on each purchase than first-timers. And, according to an Adobe study, business from loyal customers can keep a company afloat during an economic downturn. There’s another good reason to turn your focus on building lasting customer relationships: cost. Depending on which study you read, it’s anywhere from 5 to 25 times less expensive to retain a client than to acquire a new one.
Although client retention has undisputed benefits, building customer loyalty in the digital age can be a challenge. Your customers are better informed and have more choices than ever before. Not limited by geography, they can do business via the internet with anyone, anywhere, and easily find different brands or different vendors if customer experiences don’t meet their expectations.
So what can you do to keep your customers around through thick and thin? Try these five client retention strategies that go beyond transaction-level interactions to foster client relationships that last.
1. Personalize Experiences
The digital age has taught your customers that they have instant access to product and pricing information and that they can shop on a variety of websites with just a few clicks. It’s also shown them that browsing and buying can be personalized. When returning customers visit an e-commerce site, they’re often greeted by name, and relevant offers or product suggestions are waiting for them.
You can also show your clients that you recognize them and appreciate their business by personalizing experiences. Rethink marketing to your entire customer base, and, instead, send relevant messaging and promotions to specific segments of your list. Reach out to VIP clients with promo codes for special offers or to clients who you haven’t heard from in a while to encourage them to reconnect. Handwritten notes and client appreciation letters are also great ways to show your customers that you genuinely care about maintaining your relationships.
2. Add Value
With so much information available to your clients — and to rival brands — competing on price will only eat away at already thin margins. A better client retention strategy is to promote high value instead of cut-rate pricing.
Depending on the products or services you offer, you can increase the value your clients receive by providing consulting or design services, technical expertise, top-notch customer support, or even face-to-face interaction that your competition can’t deliver. When your clients understand the value of doing business with you, it will be hard to convince them to go anywhere else, even for lower prices.
3. Give Back
Social consciousness is growing among your customers, especially as more of them fall into millennial or Gen Z demographics. These clients are characterized by their social responsibility, and they choose to spend with brands or businesses that source responsibly, are committed to sustainability, and support causes they believe in.
The data you collect on your customers can help you learn more about them and their values. Demonstrate that you are likeminded and doing your part to preserve the environment, support fair trade, and, generally, make the world a better place. It’s not enough just to do it, however — you need to tell your story on your website, with marketing materials, or any other way that gets the word out. You can even organize campaigns that give your clients an opportunity to get involved.
4. Build a Community
When you dig into customer data, you’re likely to find that your loyal customers have a lot in common. They experience the same pain points, they have similar goals, and they probably share some personality traits. Use that information to build a community that helps your clients overcome their challenges, learn, and grow.
Cast your business in the role of a resource or gathering place where your clients can find solutions and share ideas. Determine which social media platforms your clients commonly use and promote interaction there. Also, encourage user-generated content that allows your clients to share in their own words their experiences with your products or services. Hearing about the value your business provides — from an actual customer — can make a big impact on customer retention
5. Make Doing Business Fun
It’s no surprise that people will continue to do things that they find enjoyable. Whether you are a B2B or B2C company, there’s no reason why there can’t be an element of fun in doing business with you. Consider adding a game element, encouraging referrals through contests or offering frequent buyer or loyalty rewards that people will delight in. In a fast-paced world, a little fun mixed in with doing business can be a welcome break that your clients can look forward to.
One Important Element of Any Client Retention Strategy
Regardless of the client retention strategies you choose, it’s important to monitor results and measure success. This is one area where intuition and anecdotal information won’t put you on the right path — but data will. Determine key performance indicators (KPIs) like customer retention rate and second sales so you can gauge how effective your strategy is at retaining clients.
If you aren’t getting the results you need, make adjustments to your strategy. The stakes are too high and options for other places for your customer to do business with are too accessible. Make sure when it’s time to spend, they choose your business.