Constantly trying to acquire new customers can be costly and resource-intensive. An existing customer is worth more and is often less work than a new customer. A lifetime value customer will continue yielding returns as long as you continuously invest in programs which serve and offer added benefits to your existing customers.
According to Forrest research, it costs 5 times more to acquire new customers than it does to keep current ones. Why?
- Acquiring new customers requires a lot of hard work and expense to first learn about the customers and then proceed to attract them to your brand or product.
- Converting leads into customers takes time – time where no money is entering the business
- Resources are often wasted while learning all there is to know about your target audience. Once you’ve acquired the right customers you know exactly how to reach them, what messaging they respond to, and how to fulfil their needs
So, if you never invest in customer acquisition, how will you ever have customers worth retaining? The key is investing in the right customers off the bat to avoid wasting any time and resources. Establishing the size of the potential market before you even begin marketing, as well as the feasibility of the measures which need to be set in place in order to attract those customers is key.
Acquiring customers which are worth retaining
So, how do you ensure that your customer acquisition process doesn’t cost more than it needs to or take longer than it should?
- Know your target market well by conducting thorough market research beforehand
- Get the right messaging to the right people at the right time through effective marketing techniques which align with your business strategy
- Align your employees and sales staff with your company culture which, ideally, should be a customer-centric culture. To attract the right kind of audience, you need the right kind of people. Someone who hates lemonade will have a hard time selling lemonade. Lemonade lovers will go quench their thirst elsewhere.
- Have an excellent customer retention strategy which encourages loyal, existing customers to do the acquisition work for you!
Now that the right customers have been acquired, the goal is customer retention.
Why do customers leave?
Once you’ve acquired your customers, one would assume that the hard part is over right? Wrong. Customers leave for a number of reasons that need to be kept in check:
- Poor customer service
- Customers feel underappreciated
- There is a poor complaint management system in place and customer feedback is ignored
- Real issues with logistics, product, or service delivery, or even interactions with your staff cause issues for the customer which they never anticipated.
Knowing why customers leave isn’t enough to retain them. These common reasons for why customers leave are great for diagnostic purposes but, simply putting measures in place to avoid these deterrents won’t be enough to retain your customers. Proactive measures for customer retention must be put in place to secure lifetime value customers.
Customer retention strategies
- Enhance the overall customer experience
Understanding the customer journey allows you to enhance the experience a customer has with your brand at every single touch point by creating meaningful experiences and worthwhile interactions.
- Implement customer feedback to make real improvements
Not only will you keep your customers happy but you’ll constantly be setting yourself at a competitive advantage – increasing the chance of customer acquisition through word of mouth!
- Show your appreciation
Invest in loyalty programs which ‘gamify’ the interaction between your customers and your business.
- Work on your relationships, not just your products.
Receiving customer feedback on products and brand experiences provides insights on what improvements can be made to your products and services while giving you tangible issues to act on. But, what about proactively investing in your relationships with your existing customers? Instead of waiting on a product review or complaint to engage with your customers, reach out on a personal level as best you can.
- Become a thought leader and provide other types of value
Customers like to know they’re in good hands. By positioning yourself as a thought leader in the industry through effective marketing strategies, your customers will appreciate supporting a credible business. You’ll also be able to bring value to your customers by sharing valuable content with them that goes beyond hard-sells of your product and service.
- Be willing to communicate – often and fast!
… and we don’t just mean via a bot. Your door should always be open to your customers and they shouldn’t struggle to get hold of you. Ensure there is a dedicated team to communicate with your customers across channels.
Competing on price is no longer an effective strategy to win over a market. Businesses need to establish firm roots in customer retention to ensure that they – along with their customers are here to stick around for the long haul.