One of the most common questions business owners ask is, “How do I get my customers to buy again?”
Easy, pay more attention to them.
Doing so takes a lot less effort than you’d think and can save you a lot of money and help you grow your business, all at the same time.
What Is Customer Retention and Why Does It Matter?
Customer retention is exactly what it sounds like. Keeping your current customers and getting them to buy from you repeatedly.
Customer retention matters because it is one of the most important factors in a company’s growth. If your customers buy your product once, then disappear, you’re going to spend a lot more money on marketing and advertising than you really want to.
It costs 5 times more to attract a new customer than it does to keep an existing one. Plus, a current customer is 60-70% more likely to buy from you again, vs the 5-20% likelihood of making a sale to a potential new customer.
Increasing your customer retention rate by just 5% can increase your profits by 25-95%.
Yes, that is a lot of percentages to take in, but they all show how important it is to pay attention to your current customers so you can keep them, instead of just focusing on new customer acquisition.
Here are 5 simple ways businesses of any size can increase their customer retention. This is not an exhaustive list, by any means, but it will get you started.
1. Follow-Up Emails After Every Purchase
This may feel excessive, depending on what business you’re in. For instance, I wouldn’t want to hear from my grocery store every time I run in to grab a few things.
However, following up with your customers to make sure they’re happy with their purchase and (if this is appropriate) that they understand how to use it correctly and are using it regularly does work.
Yes, this can work for any business of any size.
An artist who has shipped a painting to a customer can send a quick email confirming that it arrived safely and asking if it has been displayed yet. Requesting a picture (and permission to use that picture) is another good idea, as it shows your work out “in the wild.”
If your business involves a product or service that has extensive instructions, sending an automated email onboarding sequence with “quick start tips” and a reminder of where to find the full set of instructions will get your customers using your product or service faster.
Even a simple automated, “Just checking in” email to make sure your customer is happy with their product and an offer to answer any questions they may have can go a long way toward increasing customer retention.
If you want a quick reminder on why automation is a good idea, go here.
2. Weekly Feature Emails
If you’ve already committed to writing an email a week to your list, this is a great way to accomplish that for your customers. (Depending on what you offer, you may want to segment your list into those who haven’t bought and those who have.)
Sending a weekly email that shows a current or new feature and how to use it gives your customer useful information. It also reminds them of your existence, that they have your product and should be using it regularly.
As an example, TechSmith (makers of Snagit, Jing, Camtasia and other useful apps) sends me a weekly email that shows me features in Snagit (which I purchased from them) that makes using their product easier and more productive.
3. Write a Monthly Customer Newsletter
If you don’t want to write to your customers weekly, do it every month instead.
Include tips on how to use your product or service, new features, new products, work in progress (WIP) or what’s coming down the pipeline.
This is also a good place to give a sneak peek of the inner workings of your business. Show customers parts of your process. Give them a tour of your shop or office. If you have employees, do a “featured person” article so your customers know who is behind the wonderful product or service they use regularly.
BTW, I was asked to do one of these for a large corporation I worked for, once upon a time. It doesn’t need to be stressful for you or your employee. Come up with 3-5 general questions for your featured employee to answer and use their answers in an interview format for your article.
Finally, a monthly newsletter is a great place to build anticipation for future product releases and to announce sales/special offers.
Again, the point here is to remind your customer of your existence and remind them that they have your product or service and should be using it. And, of course, to give them another opportunity to buy from you, when appropriate.
4. Collect Customer Feedback
This is an incredibly useful but regularly overlooked way to improve your business all around.
I expect there are some companies that don’t do this because they don’t want to hear more negative feedback than they already get. I strongly disagree with this idea for a few reasons.
- Hearing negative feedback, however dire or minor, is a good way to find improvements for your product or service.
- You can’t fix something if you don’t know it’s broken. When a customer tells you they’re having a problem or they don’t like a certain aspect of your product or service, they’re helping you solve those unknown problems.
- Responding to negative feedback with positive action and then following up with your customer to say “here, we fixed this, would you please give us your opinion on how we did?” is a great way to build trust and customer loyalty.
The downside of avoiding negative feedback is that you miss all of the positive feedback.
When you send out a survey or ask customers to hit “reply” in an email to tell you about their product or service experience, you’re giving them an opportunity to brag about their success.
That, my friend, is marketing gold right there.
As long as you request permission to use their comments, you can take those comments and turn them into testimonials for your website, your sales pages, your emails, etc. (And do request permission, because there’s nothing worse than a pissed off customer demanding that you take their comment down.)
The great thing about customer testimonials is they act as proof for your new customers, while reminding current customers of their own successes. This alone can spur new purchases from your current customers.
Plus, asking for your customers’ feedback shows that you do care and you are paying attention to what they want from your company. Another way to build trust and customer loyalty.
5. Offer a Referral Program
Word of mouth is still the very best form of marketing there is.
Are you more likely to take the advice of a friend or to randomly buy a product off the internet?
Most people go with the advice of their friends.
A referral program can be as simple or as complicated as you want it to be.
Simple would be giving your customers a coupon code or “secret password” to use, along with their name when they buy from you. You record each referral in a spreadsheet or even a notebook.
Then the customer would get some sort of benefit after a certain number of people they referred became new customers. That benefit could be anything from free product to a VIP offer of some sort. Depending on your business, that could be physical, financial or virtual.
For example, a software company could offer a one-time “done-for-you” service that the customer would normally have to pay for. A consultant could offer a percentage off a customer’s next project. A massage therapist could offer a free massage.
You get the idea.
Complicated would involve using customer referral program software to track referrals and make special offers to your customers through an app.
The whole point is to get the word out about your product or service, via your already existing customers, while getting your current customers to continue using your product or service.
Find the Right Customer Retention Ideas for Your Company and Make Them Happen
Now you have some ideas to get your current customers to buy more often. Take the one (or two or four) that are right for you and put them into action.
Want a handy reference guide to these 5 customer retention strategies? Click on the button below to download your copy of the Customer Retention Strategy Reference Guide now.