As a startup owner, you often hear that attracting new customers is critical for your success. However, what happens once you create a killer digital marketing campaign and start generating qualified leads? The next step is building and nurturing relationships with them to retain them. This article explains why customer retention is vital to your startup’s success.
Increasing Brand Referrals
In today’s noisy digital marketing landscape, customers do not trust branded content anymore. Instead, they rely on recommendations from friends and families. Studies found that 92% of consumers trust personal recommendations more than any other type of marketing.
That is where referral marketing shines. Your loyal customers are your loudest brand advocates. Referral marketing is all about using their loyalty and satisfaction to boost brand credibility and generate sales-ready leads. It relies on getting your existing customers to send their friends and families to your company in exchange for a valuable reward. For example, Dropbox offers 500 MB of free storage to both a new user and the one who makes a referral.
Apart from brand referrals, there are many alternative types of social proof to use, such as:
- Encouraging customers to share user-generated content, such as their photos and videos of your products.
- Asking customers to review and rate your products on your website, social networks, and relevant business directories.
- Asking your most loyal customers to write testimonials.
New leads require multiple touchpoints with your brand before making a purchase. Repeat customers, on the other hand, purchase more often from your brand and spend more than new consumers. They have already learned the value of your products. Statistics back me up on that, emphasizing that 8% of your repeat customers contribute to 40% of your revenue?
Sure, just because you have developed a quality product does not mean you will encourage customers to come back and stay loyal to you. Your repeat shoppers expect you to recognize them and reward their loyalty. That includes providing highly personalized user experiences, such as segmented emails, targeted product recommendations, personalized customer support, offering a loyalty program, and relevant offers based on their previous purchases.
Investing in a reliable CRM (customer relationship management) system is one of the most critical steps to take. It collects customer data from your sales, marketing, and customer service tools, and keeps it in a central location so that everyone in your team can use it.
Let’s take the example of your call center. When a customer calls, they expect your sales and service reps to know everything about their previous experiences with your brand. Fortunately, modern call centers often use VoIP technologies for small businesses that are built on the cloud and delivered over the internet. Therefore, by integrating your phone system with your CRM, you will be able to access customer information, such as their name, demographic data, previous purchases, service inquiries, etc.
With the rise of the internet, the path to purchase has become longer and more complex. Today’s customers are tech-savvy and immune to traditional marketing techniques and channels. They do not make impulse buying decisions. Instead, they read multiple blog articles, search for peer reviews, compare products, and communicate with brands via multiple channels. Given that, it is not surprising at all that it often takes 6-8 touches before you generate a viable sales lead.
To attract new customers, your startup needs to invest in creative marketing campaigns that will set it apart in the competitive landscape. Your goal is to grab a prospective customer’s attention, engage them, convert them into leads, and nurture them before converting them into paying customers. Not to mention that you need a lot of information to determine whether the lead is sales-ready. Each stage of a sales funnel requires different digital marketing practices and, logically, increases your costs.
On the other hand, enhancing the customer retention rate by 5% can boost your profits by 25- 95%. A customer is already familiar with your brand. Therefore, by engaging them and providing personalized offers, you will build meaningful relationships and inspire them to come back and keep purchasing from you.
Collecting Quality Feedback
Your engaged and loyal customers are a reliable source of information. By tracking their demographic data, purchasing patterns, support tickets, and behaviors, you will be able to create detailed buyer personas and narrow your audiences. Above all, you can adapt your marketing and sales strategies to the needs and preferences of your target buyers.
That is exactly what your loyal customers expect from you. According to Microsoft, 52% of people around the globe believe that companies need to take action on feedback provided by their customers. Moreover, 61% of consumers would share their data with you in exchange for more relevant and personal marketing and brand experiences.
Now, there are many ways to ask your repeat customers for feedback. For starters, you could create customer satisfaction surveys. If long-form surveys are not your thing, you can always create short slider surveys on your website or email. NPS surveys are popular among online customers because they ask a single question – how likely a customer is to recommend your product or service to their friends.
You could also get customers to review your products. Amazon, for example, sends personalized emails and asks customers to rate products they previously purchased.
Finally, you can also engage loyal customers by creating quizzes or using AI chatbots. Such interactive and gamified channels are a perfect way to improve communication with your customer base and collect valuable feedback.
You can also integrate your online survey tools with your CRM so it can collect data and store it in a central location. That way, your customer profiles will be automatically updated, while your marketing, sales, and customer service teams can readily use this data to provide personalized user experiences.
Satisfied and engaged customers are your most loyal brand advocates. They will spend more on your products and eagerly refer new customers to you. Above all, to get personalized customer experiences, they are eager to provide feedback and communicate with your brand regularly.