Most startups tend to place more attention and focus on the acquisition of new customers at the early stages of the business’ life. While bringing in new customers is absolutely critical, your time and resources would be better spent in cultivating loyalty with your existing customers.
Return customers are far easier to market to and will spend significantly more on your services and goods than new customers, thus showing a more direct upward effect on revenue. Additionally, statistics show that acquiring new customers may cost as much as 5 times more than retaining an existing customer, while a mere 5% increase in customer retention rates can raise profits by 25% to 95%.
Consider the following techniques to help you keep your customers coming back to patronize your business.
1. Figure out what keeps them coming back
It is very important to engage with your customers in order to find out information that will enhance their enjoyment of your product. What do they like/dislike about your business and your competitors? Will your customers value fast shipping and delivery over the ability to return opened packages? Feedback such as this will go a long way toward ensuring that your customer retention percentages are up.
2. Provide great customer service
A customer will likely remember a business with great customer service and be likely to return for any similar needs. Likewise, dismal customer service will certainly leave an impression on a customer, an impression that they are likely to pass on to friends, family and neighbours, losing you potential new clients and revenue. This 2013 survey shows that 51% of customers end a business relationship when they are dissatisfied with the customer service on offer. Remember that service with a smile will cost your business nothing, but can gain everything.
3. Offer quality in your product
Perhaps the most important of all factors that determine how much loyalty you can build with your customers is the quality of your product. Consumers often display a passionate devotion to their favourite brands and products they believe to be of stellar quality and performance that borders on religious.
A 2011 study of Apple fans by neuroscientists showed that the brand can trigger a brain reaction which is quite similar to the response of religious people to their deity. That level of fervent devotion can be harnessed by ensuring that your product is top of the line in presentation and performance.
4. Offer perks for VIPs
Loyalty can be earned through solid product and ideal business practices. Loyalty may also be bought by offering rewards to customers who patronize your business often. Both ways of gaining customer loyalty are equally valuable and should be used in tandem to ensure you have a business that is constantly growing in customer base. Examples of perks you could offer to loyal customers include personalized offers and loyalty rewards programs.