Customer acquisition and retention are two of the most important concepts for a new business to coordinate. It is a common mistake for new business owners to assume that a great quality product or service will automatically result in multitudes of loyal customers.
The first half of the battle that is consumer marketing is acquisition. What many entrepreneurs fail to anticipate is the cost to acquire customers (CAC). This add up to hundreds of thousands of dollars for companies after calculating the costs of advertisements, resources and labor. The return of gaining a new customer often does not occur for a few years.
When taking into consideration the financial toll a new customer takes, it becoming increasingly important to retain that customer’s loyalty in the subsequent years. In addition, studies have shown that it is 50 percent easier to sell to an existing customer, and that a 5 percent increase in customer retention can increase a company’s profit anywhere from 25-95 percent. These statistics show how customer loyalty and satisfaction can be the key to any company’s success.
Once you’ve successfully secured any number of customers, here are a few ways you can keep them coming back for more, turning their loyalty into profit:
- Social Media
Don’t underestimate the power of social media when it comes to staying connected to your customers. Twitter, Facebook and LinkedIn are powerful tools to alert customers about sales or updates about your company. Even Instagram can be a useful outlet for certain companies. When determining which social media channels will be most useful for you, it is important to have a clear understanding of your company’s client demographic and which channels they will be most likely to be active with. This will not only help you to target the appropriate people, but also conserve resources.
- Loyalty Programs and Special Discounts
Customers like to feel as though they are each individually valued. Labeling a repeat customer as a VIP, or even something as simple as “awesome,” can drive his sales up. One of the primary problems in beginning a loyalty program is convincing people to join. This factor can be completely avoided by automatically entering a customer into a loyalty program such as a buy ten, get one free card. People are twice as likely to finish a loyalty card if they are automatically started on it.
Making your customers feel special is a good way to ensure their loyalty. Sending out a personalized email, such as a birthday or holiday card, can greatly increase the likelihood of a customer returning for business. The element of surprise when it comes to personalization can also result in a happy client.
- Key Words
This applies to both customer acquisition and retention as an important element of brand marketing. It is important to avoid any kind of friction words or phrases that might exist as pain points for your audience. For example, customers are much more likely to respond to a “small fee of $10” as opposed to just a “fee of $10.” On a similar note, positive social proof always goes much farther than negative. If you’re selling a special kind of pen, you would not want to say that 90% of the world does not have said pen, rather you’d want to highlight the amount of people that do own one. The 90 percent statistic makes the consumer feel justified in not buying the product, since most people do not have it, however, focusing on how many do own the product can make the consumer feel as though they are apart of something exclusive.
This is an element of customer retention that small businesses in particular should try to capitalize on. A smaller business can be marketed as a contrast to big businesses which may not have the time to address every customer’s needs. It has been shown that customers value quality over speed when it comes to customer service. Additionally, ensuring a question or concern is addressed thoroughly the first time will ultimately save time while simultaneously increasing customer satisfaction.
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