What Is Customer Retention?
Your marketing efforts shouldn’t stop as soon as a new customer makes her first purchase. In fact, it’s quite the opposite. Whenever you gain new customers, you should focus your attention on nurturing that relationship to build customer retention and loyalty.
Customer retention encompasses all the actions and efforts that go into earning repeat customers. It is different than customer acquisition or lead generation because you’ve already converted the customer. Your job now is to ensure that those existing customers continue to buy products or services from your business.
Why a Repeat Customer is Valuable
Sure, all customers are important in helping your business reach its goals and make a profit, but repeat customers are some of the most important shoppers you will find.
Here are three reasons why repeat customers are so valuable:
- Higher-than-average order value: Repeat customers spend an average of 3-15 percent more than new buyers. This increase in spending helps to boost your overall average order value and gives your business an advantage when it comes to meeting your goals.
- More likely to convert: There is a 60 percent chance an existing customer will make a repeat purchase, compared to just five to 20 percent for a new prospect. Since a repeat customer is more inclined to buy, you will have to spend less time, money, and effort marketing to them.
- More referrals: Happy customers are more likely to refer their friends and family to your business. And, referrals don’t just get more customers, they also get better customers. Make sure to incorporate referral marketing when thinking about your overarching retention plan to take advantage of happy brand advocates.
How to Get Repeat Customers
Motivating current customers to make a repeat purchase still requires work. The good news is that you can leverage your existing relationships and build on top of your brand credibility to wow your customers and boost loyalty.
Here are five ways to get repeat customers:
- Offer an incentive: Give your existing customers reasons to come back and shop. Discounts are a great way to get people to purchase again, and by framing these offers as exclusive to existing customers, they will feel valued by your company and be more likely to buy.
- Establish yourself as the industry expert: Create content like catalogs, landing pages, social posts, and more which educate your customers on your product or service and highlight why you are the best option. These marketing materials will offer valuable information to customers and help position you as the expert.
- Engage with your customers: Respond to customers on social media, send automated follow-up emails after a purchase, or create targeted content. These marketing strategies help deepen your relationship and make you stay top of mind. Don’t forget, the more personalized you can make these interactions, the better (think tailored product suggestions or a birthday email).
- Share success stories: It’s no secret that positive word of mouth is one of the best ways to gain new customers, and you can also use this tactic with existing customers as well. Share testimonials and other user-generated content online and in emails to your existing customers. These user-focused materials will help build a community around your brand of people who love your product.
- Keep customers informed: Every time you launch a new product, open a new store location, or simply have something newsworthy to share, let your customers know about it. A monthly email highlighting the latest news is a great way to keep customers engaged, and give them an opportunity to buy.
Above all else, the secret to high customer retention rates is exceptional customer service. Whether a customer faced an issue with your product or you simply go above and beyond during the purchase process, a finely-tuned customer service strategy will make consumers more likely to purchase from you again and again.