Did you know that 80% of your future sales will come from only 20% of your existing customers?
With this in mind, it’s clear that your loyal customers are the ones that keep you in business and that you need to implement effective customer retention strategies so you don’t lose them.
“80% of your future sales will come from 20% of your customer base.”– Small Business Trends, 2020.
With most small businesses focused on new customer acquisition, it’s important to not forget the other side of the coin: growing your business through customer retention.
Throughout this post, we look at the top 6 customer retention strategies that will help you have your best financial year yet. Let’s dive in!
Customer retention strategies to grow your business
1. Invest in customer success
Let’s face it — your customers aren’t going to be lifelong if they don’t find value in the product or service you offer. This is why it’s so important to do everything you can to ensure customer satisfaction from the get-go.
One way to do this is by empowering your customers with helpful resources like:
- Product guides
- FAQ pages
- Set-up manuals
- Video tutorials
As well as any other resources they need to get the most out of your product.
By making it easy for your customers to unlock the full potential of your product, you can make sure that your customers feel good about buying your product and doing business with you — two factors that really help when it comes to customer retention.
2. Support your customers as much as possible
Another way to make sure your customers keep coming back is by offering excellent customer support and service. Especially when you consider that a single bad experience with a business stops 80% of American customers from ever returning.
“One bad experience stops 80% of customers from returning to a business.”– Small Business Trends, 2020.
To provide great customer service, you’ll want to make yourself available to customers by:
- Social media
As well as any other ways your customers like to communicate. Customer portals are another great way for small businesses to provide their customers with 24/7 online self-service without hiring round-the-clock staff.
3. Make customer retention part of your sales strategy
Contrary to what you might think, one of the most important customer retention strategies starts before you make a sale, during the decision-making stage of the buyer journey.
At this point in the sales process, sales reps often get so excited about closing a deal that they forget about the need for alignment between what a product offers and what a buyer is looking for.
To stop this from happening, you need to consider the importance of customer retention to your revenue goals and your business’ health as a whole. This way, your sales team can focus on both customer acquisition and retention and you can rest assured that your sales reps:
- Won’t oversell or make promises your product can’t live up to
- Remain transparent about the terms and conditions of the sale
- Won’t rush your buyers into making a purchase
All of which will help improve your customer retention and ensure your customers are set up for success from the start.
4. Use customer feedback to provide best in class service
Part of retaining lifelong customers is continuously offering them something new. Whether that’s a new product or a better customer experience, your goal should be to constantly deliver more value to your customers. This will not only keep them hungry for more but also stop them from doing business with your competitors.
For inspiration on how to improve your business, you’ll need to collect as much customer feedback as possible. To start, reach out to your best customers (those who’ve been with you the longest and shop with you the most frequently) for feedback on what they love and don’t love about your business. Take both the positive and negative feedback they give you and adjust your operations accordingly.
Another valuable source of information you need to collect is from the customers who churn. Find out why these customers didn’t do business with you again and work to address the issues they bring up.
5. Nurture, nurture, and more nurture
One of the most effective customer retention strategies is to never stop nurturing — even after you’ve closed the initial sale.
One way to do this is by frequently engaging with your customers through email, social media, forums, and whatever other platforms they use.
Another way is to build a sense of community around your customers — just think about the customer loyalty brands like Starbucks, Apple, and Patagonia have been able to create through this mechanism.
Regardless, of how you choose to nurture your customers, you want to do your best to stay top of mind and be the business they’re always recommending.
6. Treat your best customers like VIPs
The last of our customer retention strategies is to pay special attention to your best customers. These are the ones who’ve been loyal to your business for years, keep coming back, and constantly refer new business to you — these are the customers you can’t afford to lose.
To make sure you don’t lose these customers, you’ll need to make sure that you’re always going the extra mile. Whether that’s an extended warranty period or longer payment terms, treating these customers well will pay off as they continue to buy from you and recommend you to their friends and family.
For this group, you’ll want to leverage personalization wherever possible to give them a VIP experience they can’t get anywhere else. Here are a few things you can do to get started with this:
- Give your VIPs exclusive access to new products
- Reach out with product recommendations that are personalized to their needs and preferences
- Hold an invite-only VIP sale that’s only open to your best customers
- Congratulate your VIPs on milestones like a new child or promotion with a handwritten card or an on-the-house gift
Recap: Growth-focused customer retention strategies
Small businesses are often so focused on getting more customers that they forget about the customers they already have. This, however, is a big mistake as focusing on your existing customers is much a more profitable strategy.
To drive the best bottom line possible, here’s a quick summary of the top 6 customer retention strategies you need to implement.
- Empower your customers with the resources that will help them get the most out of your product.
- Support your customers through every part of the customer journey — from lead to repeat and everything in between.
- Make customer retention a crucial part of your sales strategy.
- Collect customer feedback and use it to continuously deliver more value to your customers.
- Keep in touch with your customers and get them excited about doing business with you.
- Reward your best customers for their loyalty with personalized perks and benefits.
See how Method:CRM can help improve your customer retention with a free 30 day trial.
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