Customers are the lifeblood of any business, that much is obvious. But what many companies (both big and small) fail to realize is that they could be much healthier in the long run if they built a base of loyal, long-term clients, rather than constantly trying to chase down new customers.
Research shows that it costs five times as much to acquire a new customer as it does to retain a current client.
Even a mere 5 percent increase in customer retention can raise profits by 25 to 95 percent. Whether you’re running a freelance business, side hustle or a Fortune 500 company, retaining customers leads to higher sales and lower acquisition costs, building a powerful foundation for your brand. Of course, it all starts by giving your clients a reason to stick with you for the long haul.
These hacks below will show you how it’s done:
Streamline customer service
No matter how great your product or service may be, just about every business will have dissatisfied customers. The way you respond to complaints makes a huge difference in whether or not someone remains loyal to your brand. Even measures like providing up-to-date contact information on your website and ensuring that phone support can offer reliable answers and friendly service will help customers stick with you when they have a problem. After all, studies show that 70 percent of buying experiences are based on how a customer feels they are being treated.
Related: Create Brand Loyalty and Acquire Lifetime Customers in 3 Steps
Focus on scalability
Scalability, or the lack thereof, can be a major pitfall for SaaS developers and other service providers. When working with B2B clients, you must be ready to grow alongside your client’s business in a way that adequately addresses their changing needs.
Build out your service offerings with scalability in mind. How will you add new users to a client account? How will you address increased data consumption, or a higher number of service calls? Focus your sales strategy on ways you can continue to provide value — and increase prices without scaring off the client — as their usage demands grow.
Show your appreciation
Most business owners understand the importance of a “thank you,” and that includes showing appreciation to customers. Doing so through special offers or gifts can significantly impact client retention.
According to a report from the U.S. Small Business Administration, 68 percent of customers end a business relationship because they don’t feel appreciated or cared about. Showing you appreciate your clients builds customer loyalty.
Improve the onboarding process
Many companies experience the greatest churn during the first few weeks after a new client signs up for their product or services, when they are still in the onboarding phase. This time in the client-brand relationship should receive extra TLC if you want the person to stick around for the long haul.
Setting clear and transparent expectations regarding your services will help alleviate churn. When customers know what to expect (including your product or service’s results, how customer support works, etc), they won’t come in with unrealistic expectations. Service providers can especially benefit by creating a relationship “roadmap” that outlines a detailed plan for what you will accomplish.
Continued engagement
Depending on your business model, clients may not spend money with you each month. However, even if most of your customers don’t need to buy from you on a consistent basis, this doesn’t mean you should let your brand be forgotten.
Consistently providing high-value content through blogs, social media posts and other content marketing channels will keep your brand visible and top-of-mind so that clients will come back the next time they have a problem you can solve. Engage to build trust, not just make another sale. It will pay off for your business in the long run.
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Always strive to improve
No matter what industry you work in, a successful entrepreneur knows that the best way to keep customers loyal is to constantly look for ways to improve. Whether this comes from tweaking your customer service standards or upgrading the product itself, this forward-thinking mindset will ensure continued relevancy and prevent competitors from taking advantage of your brand’s weaknesses.
In many regards, customer retention can appear to be even more challenging than customer acquisition. But as you follow these steps for delivering an unsurpassed experience, you will grow a firm base of loyal clients who will buy from you time and time again. Focus on these long-term relationships, and you will see the growth and profitability you need.
Originally published May 5, 2019.
