Customer Retention: How Valuable Are Your Current Customers?
We talk a lot about driving more traffic to your website, converting prospects to leads, and leads to customers. But do you remember learning in Business 101 that it costs more to acquire a new customer than to keep an existing one? That’s why it’s so important to always think about customer retention.
Acquiring new customers for your outdoor business is vital for growth. We get it. But don’t forget about your current customers. They have already purchased a product or service from you. If the experience was good, they’ll likely come back.
Your current customer base can also write a review, tell their family and friends, and even defend your company from criticism. So isn’t it time to turn your customers into promoters? We think so. In this post we’ll go over:
- How valuable your current customers are to future profits
- Other factors that play a role in customer retention
- How to delight customers and turn them into promoters
The Value Of Current Customers
The inbound marketing process attracts new customers, converts them into leads, closes the sale, and then delights. And yet only 29% of businesses are focused on maximizing the lifetime value (aka delighting) of their customers. All stats prove the value of current customers far exceeds the value of new customers.
- The probability of selling to an existing customer is 60-70% compared to 5-20% for a prospect.
- A customer is 27% more likely to purchase from you a second time, 45% a third time, and 54% a third time.
- 80% of your future profits will come from 20% of your current customers.
Customers have endless choices. There is no longer one outdoor gear company. There are hundreds. And if a customer has a bad experience with your brand, they can pick a new one to buy all of their summer camping gear. Separate yourself by being one of the few companies who focus on keeping your current clients more than just satisfied. Focus on wowing them at every touch.
Customer Retention Factors
Customers have so many options to choose from when it comes to the latest outdoor gear or outdoor services. Several things factor into why a customer chooses one company over the other:
- Price: Many companies say they don’t want price-conscious customers and instead, value-based customers. Keep reading because delighting customers adds value to your product or service. But no matter how valuable your product or service is, the price is top-of-mind for customers.
- User experience: If customers can’t easily book a room online at your rustic cabin in the woods, you might lose them as a lead. If your online store for fly fishing rods takes forever to load, your prospect will look elsewhere. Creating new online experiences for returning customers will maintain or increase your customer retention rate.
- Communication: When communication is clear, transparent, and two-way, customers are more apt to come back. Communication is more than when you’re talking to a client on the phone. It’s being honest and factual in blogs. Clear directions in an email. And fast replies to Facebook messages.
Price, user experience, and communication will most certainly help you retain customers. But now it’s time to turn those customers into promoters.
Everyone wants reasonably priced goods and services. They want their online shopping experience to be easy. And honest, transparent communication will keep them coming back. But when you delight your customers, you exceed their expectations and turn them into a promoter.
Delighting customers means:
- You answer their questions. You can do this with a blog post, responding to fans on social media, or replying to an email in a timely fashion.
- You help them out. Go beyond answering customers questions and provide additional resources or recommend additional services.
- Customers achieve their goals. Your product or service should help customers achieve their goals. You can find out your customer’s goals through surveys and creating buyer personas. But if your customer’s goal is to catch more fish, your fly rod or fishing guide better help them achieve that.
- You’re excited to help them. Customers take note when your team is enthusiastic and excited to help them. Even if it’s just showing a customer where the bathroom is. Customers want warm and personable interactions with your company.
It’s easy to turn customers into promoters when you focus on delighting them. A promoter is the millennial’s version of word-of-mouth marketing. Promoters of your brand write reviews, engage with your company, defend your company, and tell friends and family about how great you are. You can turn customers into promoters by:
- Giving them something. We all love free stuff so give them free stuff! It doesn’t have to be huge either. Send them an exclusive hat only available to customers who have purchased a certain amount. You can also give them a discount for being such a loyal customer.
- Get their feedback. If a customer keeps coming back to buy your company’s goods or services, there’s a reason. So get their feedback! Loyal customers want to be heard and if you recognize them by inviting them to a focus group they’ll feel extra special.
- Providing even better service. Southwest Airlines is known for their exceptional customer service. But loyal customers get even better service. A-List Preferred customers not only earn more points but they have a special number to call for quicker service.
- Inviting them to a special event. Invite your loyal customers to the grand opening party of your second rock climbing gym. Take your top clients to a sports game and wine and dine them in a suite.
Put Your Current Customers First
Delighting customers is the last part of the inbound methodology and one many marketers forget. Putting your current customers first turns them into second, third, and fourth-time buyers. Bonus: they also become brand promoters!
If you’d like to learn how Sage Lion Media can help you get started with an effective inbound marketing strategy, contact us today.