Many organizations focus primarily on finding new customers. However, a strict emphasis on prospecting will underrepresent the majority of your sales. By neglecting customer retention, businesses fail to maximize the profits they could earn from loyal customers. This is a large loss, because customer-retention efforts are often far more profitable than are new business efforts.
Data consistently shows that organizations that spend even 5 percent of their marketing dollars on loyalty marketing are 20-25 percent more profitable than organizations that spend nothing on loyalty marketing.
Because retaining a customer costs 10 times less than does recruiting a new customer, the return on investment for retention programs is generally very high. In addition to increasing revenue from existing customers at a low cost, a focus on retention often also transforms your customers into evangelists for your brand – ultimately the most-profitable marketing channel at your fingertips.
With the wealth of choices and information available to consumers in the digital age, companies must go above and beyond to earn customers’ trust and loyalty. Companies can no longer retain customers simply by providing a quality product and then sitting back. In today’s ever-changing marketing landscape, the conversation revolves around the journey that customers are on with your brand. What many business owners and executives often overlook is that most of this journey takes place after the purchase, which presents a wonderful opportunity for you to truly create a “wow” for your customer base.
The benefit to your company of wowing its customers is the customer lifetime value. The best companies obsess about every post-purchase touch point of the customer experience to guarantee repeat business and to increase opportunities for cross-selling and upselling.
You can start by diving into your customers’ purchase history with your company to find ways to save them money or bundled offerings and complementary products in which they may be interested. Customers are wowed when a company’s representative says, “I know your business. I’m not just a manufacturer who takes purchase orders and gives you what you want. I’m going to be a solutions provider to uncover ways to help you grow your business.”
As part of your mapping of the customer-decision journey, perform an extensive analysis of the post-purchase experience that your customers currently have. Then, brainstorm specific strategies and initiatives that can improve this continued brand journey. Consider the following examples as inspiration:
• Add a post-purchase follow-up call to see if the customer is happy or has any issues with the product or service.
• If you are providing a major service or product to another business, perform a thorough immersion into your client’s business with a one-day brainstorming session between senior leaders of both firms.
• Craft social media posts that promote your customers’ successes (with their permission).
• Deploy an annual Net Promoter Score survey, asking about ways in which your offering and service can be improved.
As valuable as these types of demonstrative tactics may be, they also must be incorporated into a larger marketing strategy that your entire company can rally around.
Chris Ciunci is founder and managing partner of TribalVision, which has offices in Warwick, Boston and New York.
