Customer retention
Encouraging repeat purchases requires special marketing tactics all on their own. Learn how to engage with existing customers to turn them into repeat, threepeat, and fourpeat customers.
What is customer retention and why should we strategize around it?
Customer retention is the ability of a company to retain its existing, paying customers over a period of time. Companies focus on customer retention because acquiring new customers often costs more than keeping existing ones. Companies that create quality products, provide excellent service, and foster brand loyalty, see higher customer retention rates than those who do very little – and that can often be perceived as "indifference". Increasing customer retention by just 5% can boost profits by a staggering 25% to 95% (Bain & Co). Companies that are able to retain a high percentage of their customers year after year tend to see faster growth and spend less on marketing to this portion of customers. Building long-term relationships through customer satisfaction and loyalty drives revenue by turning one-time buyers into lifelong, high-value customers.
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Increase customer retention with perks
How can perks reward your customers for sticking around? Let's explore.
How a customer perks program affects LTV
How do you increase the lifetime value of your customers? Offer a reason for them to come back.
Cross-selling: Effective cross promotion without distraction
Cross-selling means encouraging current customers to purchase additional products or services you offer that complement their original purchase. Done right, it can significantly increase customer lifetime value.
Wondering where to start?
We understand not every company has budget or resources at the ready to take on many of these projects. Under each recommendation, we include a "do it right" version for those with funds, and a DIY list of tactics that can enable you to still deliver on your company promises without significantly expanding your operating budget.
- Get benchmarks. Understand what data you have already for customer satisfaction, CSAT, NPS, third party review sites and product/survey feedback.
Do it right: Use Usertesting.com, Hotjar, or NPS software to gather feedback from your customers.
DIY: Contact your top ten customers and give them a $25 gift card to send a video of their feedback answers.
- Provide excellent customer service. Giving prompt, attentive service helps keep customers coming back. Respond quickly to inquiries and complaints to get to quick resolutions.
Do it right: Implement 24/7 support, quality assurance program, recurring surveys, and empower staff to resolve issues. This comprehensive approach raises the bar on service quality.
DIY: Create a basic knowledge base that answers your top questions. Enable all staff to independently handle inquiries and complaints to meet immediate customer needs in real-time. Quick and personalized service matters.
- Offer a loyalty and rewards program. Special perks and discounts incentivize repeat customers and make them feel valued. Things like points-based programs or special VIP access and pricing can entice customers to stay loyal to your brand.
Do it right: Design and integrate a complete, data-driven loyalty and rewards program across the customer journey with special perks, pricing, and promotions for your best customers.
DIY: Identify your most loyal segment and offer ad hoc perks and upgrades like free gifts on milestones. These are the table stakes for learning how to retain your top customers.
- Quality products/services - If you provide a great product or service that customers love, they'll want to stick with you versus taking a risk on competitors. Deliver consistent value and quality.
Do it right: Build out testing, piloting processes and collect user feedback systematically to continually refine and improve your offering.
DIY: Be agile and tap into your user community to quickly address fixes and improvements around their most pressing wants and pain points.
- Add value. Useful, interesting content keeps your business top-of-mind. Establish yourself as an authority and teach people how to use your products as you create guides, how-tos, or videos on topics in your wheelhouse and your products.
Do it right: Develop and distribute recurring educational, inspiring omni-channel content centered around your customers’ interests and needs to nurture them over time and teach them how to use your products.
DIY: Share articles, newsletters, and downloads around common, popular topics, that teach people valuble and transparent content. Stand out from the generic with the hot tips customers don't know yet.
- Referral programs. A referral is the most powerful form of marketing. Consider referral bonuses, rewards, or perks programs that give existing happy customers incentives to refer others.
Do it right: Construct a structured affiliate/rewards program with well-defined earning tiers and benefits plus spotlight key advocates in your marketing.
DIY: Casually recognize verbal referrers and showcase organic word-of-mouth in your advertising to further spur referrals
- Surprise and delight. Random or unexpected perks and upgrades make customers feel special and pleasantly surprised, driving emotional connection. It could be something like a handwritten thank you note or a special gift on their birthday.
Do it right: Define and budget for a automated, tiered surprise & delight program personalized surprises across tenure and other engagement dimensions.
DIY: Empower all staff to surprise and delight customers in real-time when opportunities arise. Recognize loyalty in the moment.
Focusing on optimizing the customer experience, showing value and appreciation, and developing emotional connections pays off in improved lifetime loyalty.
What's next?
Analyze customer data to identify at-risk groups and double down on retention strategies.