Whether you are running a physical storefront or managing an e-commerce website, you should always make it a point to get as many customers as possible. However, your efforts should then be focused on something else- retaining them.
Far too often, I see entrepreneurs sink their time and money in making sure that they gain as many customers as possible, even if they already have well-established businesses.
Well, following that business strategy can actually be quite detrimental as according to a report by Marketing Metrics, the success rate of selling your products to your existing customers is a whopping 60-70%, as opposed to selling what you offer to a new customer which is only a measly 5-10%.
Why Customer Retention is Better
Although all businesses should start with customer acquisition, it is wrong if you keep on doing this, especially if you are already a well-established business venture.
Instead of focusing your marketing efforts towards attracting new customers, why not focus your time in making a good customer retention program instead?
Need I remind you about the previous report that you get a much higher success rate of selling your products to your existing customers as opposed to people who have just stumbled upon your website?
In another study by KPMG, your existing customer base will actually provide you with more profits as opposed to your new potential prospects. I want you to let that sink in.
Tried and Testing Customer Retention Techniques
If you are now convinced in making sure that you maintain your current customers, then what are you going to do? Fortunately for you, I happen to have some tried and tested customer retention techniques that you can try for your business.
1. Notice ‘Churning’ Signs
Using a CRM system, you will find a metric known as the churn rate. This metric tells you if that customer hasn’t bought anything from you in the past couple of months or years. If that is the case, then you will need to send them some follow-up emails, but you do it in a way that incentivizes their visit.
For example, create a message stating that you’ve missed them and you will provide a small discount on their next purchase should they come back to your website.
2. Reward Your VIPs
By using your e-commerce analytics, gather information about your customers who have consistently purchased your products. Treat them as VIPs by giving them some special perks that not a lot of people can get.
For example, if you find that your customers have purchased from your store for quite some time, then giving them VIP status would mean that they get free shipping for life.
Of course, you will still have to study your current business model, but the one that I just mentioned is just an example.
3. Personalize Your Emails
Your customers know that you may be employing AI technology and you may send them pre-made emails. Although you can do this, this can actually be a deterrent.
Instead, craft personalized emails by addressing them by their names. Second, state that you’ve missed them and you would love to have them back. Ask if there are things that they didn’t like about their last purchase and encourage them to say it to you. Promise them that you will fix anything so that they will be convinced to come back and trust your store.
4. Always Keep Your Promises
Any promise that you’ve stated in your letter, you must ensure that you follow through. An entrepreneur who just keeps lying just to save face in an attempt to retain customers will actually lose customers in the process.