Even smart businesses sometimes make the mistake of believing that, once they persuade a prospective customer to buy their products or services, their job with that customer is done. In fact, their job has just begun.
By the numbers
Retaining existing customers is at least as important to your bottom line—perhaps more so—than acquiring new ones. Consider for example these stats from Small Business Trends and Salesfusion:
- The likelihood of selling to a current customer is 60-70%; for new customers, it’s just 5-20%
- 65% of your profits come from existing customers
- It costs businesses 7x more to acquire a new customer than to sell to an existing one
- When you increase customer retention by just 10%, you increase your company’s value by 30%
- Returning customers on average spend 33% more than new ones
So, what’s the secret to retaining current customers?
It’s really no secret—your customers want to know that you haven’t forgotten about them simply because they made their first purchase. In other words, they want to know that you care about them and their concerns over the long haul, that yours is an enduring relationship.
Fortunately, marketing automation can do most of the heavy lifting for you. Here are 4 smart strategies to let marketing automation help you with customer retention:
1. Send gentle reminders
The right automation tools will let you effortlessly send targeted emails to current customers. For example, you could send emails describing the benefits of new products they don’t yet know about, or existing products which will add to the value of those they’ve already purchased. This not only increases the odds of repeat purchases, but also helps to solidify their trust in your business. One quick tip: don’t overdo it—keep these communications soft sell, never pushing too hard. The trick is to let existing customers know about the benefits of your products and services without pushing too hard.
2. Keep it personal
The success of your campaigns to engage current customers is a function of how well you know them, and that’s based on how well you’re managing data. Keep your communications as targeted and personal as possible. When you let customers know that you know who they are and what they care about, you’ve gone a long way to building trust. To make your job easier, choose a robust customer relationship management (CRM) tool to do the legwork for you.
3. Convert customers into brand advocates
Brand advocates are, in the simplest sense, loyal customers who like your business a lot, and they can help refer new customers to you. Sproutsocial defines brand advocates as following:
“A brand advocate is someone who elevates your brand through word of mouth marketing. Brand advocates leave positive reviews about your product. They also refer new customers and create content on your behalf. Brand advocates even contribute useful insights to your user personas.”
The right automation tools will let you identify these types of customers based on their online activity (for example, by finding those who say consistently good things about you on social media or post positive reviews). Once you’ve identified a core group of brand advocates, you could provide incentives to further empower them and, in the process, persuade them to do even more for your business.
4. Listen to your existing customers
Why guess what current customers are thinking about your business when marketing automation can tell you precisely? Listening to your customers—based on what they say on social media and in email exchanges, as well as through the use of customer satisfaction surveys—will both let them know you care about them and give you some great ideas for how to improve your business and level of customer service.
The bottom line is this: don’t take your existing customers for granted. They’re the lifeblood of your business and represent the lion’s share of your net profits. To learn more about the ways our marketing automation tools will help your business improve customer retention and thereby grow and enhance profits, check out these resources.