Customer Retention Strategies For All Business Types
It’s often been reported that it takes many more resources to acquire a new customer than it does to retain one — as many as five times the amount of resources! That being said, most companies still choose to invest in exploring new target markets and finding new customers. This takes an extensive amount of research which eats up time, money and effort. What if even a small portion of those resources were instead devoted to customer retention?
Customer retention is a highly important, yet often overlooked business aspect. Switching the focus to keeping customers rather than seeking new ones has proven to be a successful strategy for many companies. In fact, even a mere 5 percent increase in customer retention rates can drive profits by 25 percent. If your business has high customer turnover rates, you should look into fostering brand loyalty among your current consumers. They’ll be more likely to buy other products and services from you in addition to recommending your brand to others. So, how can you keep a customer for life?
The best way to retain customers is to build your company’s culture around exceptional customer service. This includes working to resolve problems quickly, fostering genuine relationships with the customers and developing an overall consumer-oriented business model. That way it’s not seen as a forced endeavor to make the brand look better, but rather it’s something that’s built into the company’s DNA. There are many successful companies, as well as several startups, who are excelling at the game of customer retention.
Nextiva recently published an article that covers 30 perfect examples of how these companies retain customers for life (we have also detailed some of the most important ones in the infographic below). For example, Patagonia helps create a community of like-minded people by launching programs designed to encourage their customers to recycle and reuse their clothing.
Since their customer base is incredibly earth-conscious, they can build a bond over a shared concern for eco-friendliness.
It’s important to make sure that customers feel heard and valued. Capital One did just that when they noticed a customer posted online about being unable to sign in to Capital One’s online portal due to spilled orange juice. The company sent the user a completely new keyboard with a handwritten note. Not only did their actions create a customer for life, but they inspired the consumer to share his positive experience with the brand. His heartening post went viral (meaning thousands of people saw or reacted to it) which could inspire others to bank at Capital One.
Another great example is how Buffer has built its culture around providing exemplary customer service. They call their customer service agents “Happiness Representatives” and always make resolving customers’ issues a top priority. The risked their title coming across as cheesy or patronizing in order to convey their dedication to customer service. Of course, they had to legitimize the term “Happiness Representatives” through action or it would not have worked.
Massive corporations can easily push sales and brand loyalty through grandeur actions and media coverage. But how can underdog small businesses with fewer assets compete? Startups can make these positive relations at a local level by becoming involved in the community or by creating a specialized community on social media. Finding niche markets are a great way for newer brands to make lasting connections with a specific audience. Expressing brand values through social media campaigns and other promotions can motivate consumers to stay loyal despite the enticement of larger businesses.
There are so many ways that companies can go above and beyond the call of duty for their customers. Expending additional resources to increase brand loyalty and, therefore, customer retention will actually be cheaper than finding new customers. Thus increasing your profit margin.
Nextiva has researched the six main ways to keep customers for life: create a community, provide excellent customer service, make the customer feel valued, associate your brand with a positive experience, keep customers interested and show them you want their business. The infographic below covers several creative ways that top companies have earned loyal customers — and how your business can too!
About the author: Gaetano DiNardi is the Director of Demand Generation at Nextiva with a proven track record of success working with B2B SaaS brands like Sales Hacker, Outreach.io, and Pipedrive. Gaetano leverages a unique hybrid of expertise in both SEO & Content Strategy to win business results. Outside of marketing, Gaetano is an accomplished music producer and songwriter.