Customer Retention: Why Loyalty Counts For Your Business

Finding new customers is tough.

In fact, it’s one of the most difficult aspects of being in business. Given that you need to sell products or services to ensure your business is successful, all business owners are well aware of the need to appeal to new customers to help keep the balance book looking good. The ability to appeal to new customers is the driving force behind so much business advice– until now.

Instead of talking about yet another method that will allow you to drive new customers to your company, let’s instead focus on the customers that you already have. The customers who have made a purchase; who already know you exist, and are hopefully well aware of what your company can offer to them. It’s these customers that you should be focusing on, at least as much as you are thinking of attracting brand new ones.

Why Is Customer Retention So Important?

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To put it simply: because there is a finite source of new customers. There is a point at which your company will have captured all the customers it is realistically going to. The smaller your business is, the more important that customer retention is, especially if your business is particularly niche. There is a point at which everyone who wants to use your business will have– so customer retention is vitally important.

A business cannot survive on new customers who shop once and then never return. That strategy might provide the occasional funding boost as new customers flock in as the result of an advertising campaign, but it’s not sustainable. Returning customers, those who are loyal to you, are worth their weight in gold.

Is It Possible To Control How Often A Customer Returns?

You can’t exactly hack into the minds of your customers, but that doesn’t mean you can’t drop hints. Changes to business technology and usage of social media give you an opportunity to constantly be nudging customers in the right direction.

One of the most effective ways of ensuring a customer will come back for more is to offer them a discount code. Send through a small card with their first order, which entitles them to between 10-20 percent off the next time they shop. The code should expire within two weeks of being issued. Everyone loves a bargain, so this will encourage them to come back sooner rather than later. Setting a time limit on sales and deals is always a good way to encourage customers to return.

How Can You Keep Your Business Fresh In Customer’s Minds?

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Social media is the best way of ensuring customers never have the chance to forget that your business exists. Offer incentives for ‘likes’ and ‘follows’ for your business pages; most companies offer a 5 percent discount code as standard. This is well worth it, as you’re then able to use social media to encourage your customers to come back. Yes, some might get the code and then block/unfollow you, but the majority won’t– meaning you can insert your company into their general social media usage.

Why Do Some Customers Shop Once, Then Never Again?

There’s no doubt that it’s frustrating when you have a one-time-only customer. You’ve likely incurred some expense to draw them to a purchase; lead generation, advertising, marketing etcetera. It’s nice that all of that worked and brought a customer to your site, but a one-off purchase doesn’t quite return your investment.

If you find single purchases are happening often, then you’re going to need to investigate why. Asking your customers is the single best way to achieve this. Look for customer satisfaction survey software, create a few questions pertinent to your business, and then ask all customers to complete it. Of course, some won’t; some people aren’t interested in giving feedback and simply will refuse to participate. That’s okay, because others will participate, especially if they’re incentivized to do so.

You need to go through the results of this survey and see if there are any common, negative themes. Maybe your site is too slow or the order process was too fiddly; if you see the same criticism in numerous pieces of feedback, then this is an area you need to improve. It’s these small problems which might make customers reluctant to return, so fixing them is a priority.

Of course, some customers may shop with you just once, and the reason they haven’t returned is nothing to do with your business at all. Customers might have been buying a gift or needed a product for a single purpose that they otherwise don’t require. So don’t assume all one-time-only customers are a bad sign for your business; sometimes, it’s just circumstance. There’s relatively little you can do to draw these customers back, so don’t lose too much sleep over them.

How Can Former Customers Be Enticed Back?

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So what about the other type of one-time-only customers; the ones who fall into the gaps? What about customers who do have reason to continue shopping with you, but elect not to do so– and don’t explain why on a feedback form?

There’s relatively little you can do to retain these customers. The issue might be that they just didn’t like what they bought, or they have found a competitor that they prefer. Harsh truths, but ones you have to follow.

Of course, that doesn’t mean you just have to accept they’re gone forever. Market direct to them, even consider outright calling customers to tell them about an exciting new offer. Any technique that can create a buzz around your business is beneficial; this strategy might just be enough to bring back those customers you had once presumed lost.

Understanding how customer retention is key to your business is vital. Shiny new customers are all well and good, but in the long run, it’s the loyal returners who will do the most for the health of your business. With your mind focused in their direction, you can be confident that your business is able to flourish, thanks to the loyal support of the customers who already know and love your company.

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