As marketers, we are often told over and over again that the goal for our business or brand should be to constantly acquire new customers. Generally, this makes sense; customers keep a brand in business, and it’s exciting for marketers to know a campaign was successful enough to encourage new prospects to make a purchase. Although new customers are certainly important, marketers shouldn’t forget about the customers that already exist. There are statistics that show focusing on retaining already-existing customers can prove even more beneficial than acquiring new customers.
So why is focusing on customer retention so beneficial? For one, keeping existing customers costs your brand less in the long run, in terms of marketing efforts. New customers cost five times more to acquire than it does to keep returning customers. Additionally, customers who have already purchased from your brand are more likely to purchase again. In this way, they can contribute to a greater return on a company or brand’s investment, because they know and like your product or service and may buy more in the long run. For example, if a customer first bought a t-shirt from a clothing brand and liked it, they are more likely to also buy shorts or accessories from the same brand next time they make a purchase. Finally, a bonus of investing in repeat customers is that they can act as brand ambassadors for your business; if they like your brand and the products, they might recommend you to family and friends, which would help you acquire new customers without the cost.
With all these benefits, brands may be wondering how to get started. What are the best customer retention strategies? Below are a few suggestions to get your marketing team started focusing on retaining already-existing customers:
- Provide positive customer service experiences. Customers who feel valued will remember their experience with your brand and come back. It is important to invest in a responsive and helpful customer service team or to invest in a CRM that can help streamline customer service tickets if you can’t hire a large enough team because customers who do not have a positive experience with your brand will remember that and choose another brand next time.
- Implement a loyalty program. Customers who have an incentive to buy because they will earn rewards if they do so are more likely to purchase. A loyalty program is also a form of personalization, which makes the customer feel special and contributes to their desire to purchase from your brand over and over again.
- Have a clear brand mission that customers can be passionate about. Customers are more likely to continue to support a brand they share values with. Or, they might choose one brand out of a few that sell similar products if they feel they are supporting a good cause or share the same values. For example, the sock brand Bombas donates one pair of socks to a homeless shelter for every purchase. Many customers might choose to stay loyal to Bombas when they want to buy socks because of their brand mission.
- Personalize the content you send to returning customers. Use the information you already have about them in your CRM, such as their birthday, prior purchases, etc. to send them follow-up emails that are personalized to them and will make each customer feel valued as a brand supporter.
Although it will always be important to acquire new customers, it’s a smart choice for brands to focus some of their marketing efforts on retaining customers that already exist. It costs less, requires less effort, and will likely increase your profits more in the long run.
