A well-known study conducted by Frederick Reichheld of Bain & Company in 2010 confirmed what has been well-known anecdotally by business owners and leaders for decades—that it costs (at least) 5 times more to bring in a new customer than it does to keep the customer you already have. Decreasing churn, that is, the phenomenon of one-off customers who are never seen again, is not the way to build a sustainably profitable venture. You don’t want to run a business that behaves like a revolving door.

Your repeat customers are loyal to your brand because they have had good experiences with you. Due to this, repeat customers are highly likely to promote your brand through word of mouth or social media and on review sites such as Yelp and Trip Advisor. In other words, your repeat customers pay you with referrals and testimonials that bring more new customers to your door. It doesn’t get better than that!

As you build your business and go about refining and strengthening your brand, you should strive to cultivate a community that believes in your brand, that is loyal and is invested in seeing you succeed. One of the best ways to ensure customer loyalty is to make your customers feel that they’re a part of something rewarding when they engage and do business with your brand. Below are a few low-cost, no-cost actions you can take to promote customer loyalty, which usually translate into customer retention, I.e. repeat business and referrals, too.

Surprise and delight

Pleasant surprises are always a good thing during the course of a customer relationship. Introducing a nice surprise, typically in the form of an unexpected little perk for the customer and in particular at the beginning of the interaction, is a great strategy to differentiate yourself from competitors. It’s good business to show customers and serious prospects that you’re a cut above.

Customer experience, customer service

According to a 2018 survey of US consumers released by the multinational professional services company Price Waterhouse Coopers (PwC), which happens to be the second-largest professional services firm in the world, consumers rank price and quality at top-of-mind when buying decisions are made. But when they think about interacting with companies they buy from, 73% of survey respondents reported that positive experiences influence their purchasing decisions and 65% feel that a positive buying experience is more influential than great advertising.

You basically have only one chance to get your customer experience and service right. 32% of customers surveyed reported that they’d stop doing business with a brand they loved after even
one bad experience.

Make an effort to structure the experience your business provides to reflect what matters most to the customers. When customers feel appreciated the company benefits, primarily from customer retention and referrals. 86% of survey respondents indicated that they’re willing to pay more for a good end-to-end customer experience and 80% say their reason for switching to another company was poor customer service.

Email marketing, social media, blog, newsletter

Update your customers by way of your website and social media accounts about what’s new—-special offers, new products or services or special pricing and be certain to include those who have not purchased in a while. If you publish a newsletter and/ or blog, include your product and service special offers, special pricing or new product or service announcement. Get your community excited about what’s happening and they may share the good news with those who could become your future customers and loyal fans.

Retain on your mailing list all customers with whom you’ve worked over the past five years, including those who’ve been inactive, and also retain on your mailing list prospects who have had some level of engagement with your organization. Always position yourself to win over a prospect or win back an inactive customer. Until someone clicks the opt-out button, continue to send marketing emails, your newsletter and/or your blog. You never know when lightening will strike.

Payment made easy

Make paying for your products and services easy. By adding digital payment options such as Square, Paypal, Bill.com, or Stripe and facilitating direct deposit payments to your bank or debit card and/or accepting online check payments, you’ll encourage customers to do business with you more often because you’ll make paying invoices a convenient process. Easy payment is an element of a pleasant customer experience.

Website and social media

Merely having an “online presence” is no longer enough. The internet is over-saturated and short attention spans are the norm. To maintain the appeal of your social media accounts and website, make your content—text, audio and video–relevant and timely. Constantly confirm that your posts and images resonate. Update regularly with fresh images, blog posts and and other text, audio and/or video.

Thank you card

The survey revealed that human interaction matters now—and 82% of U.S.
consumers want more of it in the future. With that in mind, a small personal gesture, such as sending a thank you card (or note) to a new customer, or one who has spent a certain threshold amount is a powerful statement. Your card or note can create or enhance the feeling of community and build loyalty for your brand.

Special occasions

The PwC survey found that when customers feel appreciated, they are more likely to recommend or endorse a brand on social media or review sites, subscribe to a brand’s newsletter, sign up for special promotions and make repeat purchases. Sending cards to mark occasions such as customer birthdays, if that is appropriate for your industry, or holiday cards in December is a predictable but usually much-appreciated way to communicate to customers your thoughtfulness.

Showcase testimonials

If visitors to your website and social media accounts see your customers and colleagues singing your praises, in text, audio, or video, then chances are they’ll be more likely to take a chance and buy from you themselves. User-generated content in the form of reviews is a powerful way to win customer loyalty. Case studies in text or video format, are also quite compelling since the story of how you and your team assess and resolve a problem is told.

After sale service

After-sales service often amounts to listening to customer feedback and being available to answer questions or give encouragement. After-sales service can make the difference between a happy customer who loves doing business with your organization, or one who is underwhelmed or even frustrated. A follow-up call to a customer, especially a new customer, will 1). Show your empathy—you care about the customer’s pain point or goal; and 2). Ensure that the customer is achieving objectives. If the solution isn’t working as expected, you can quickly diagnose the glitch and fix it. If a training will help, deliver it, on the spot or by appointment. You want to create a cadre of satisfied customers who will become your loyal cheerleaders.

Do the math

While at the University of Lausanne in Switzerland, the Italian economist Vilfredo Pareto (1848-1923) in 1896 demonstrated that on average, a business will derive 80% of its revenue from 20% of its customers. Further research has demonstrated that the likelihood of selling to an existing customer is 60% – 70% and repeat customers will on average spend 31% more than your new customers. Just a 5% increase your company’s customer retention rate will reward you with a 25% increase in profits. Are you convinced yet?

Thanks for reading,

Kim

Image: © WalterFilm. Marilyn Monroe in a publicity photo for How to Marry a Millionaire (1953, 20th Century Fox Studios)