The specifics vary widely by industry, but I think we can agree it costs significantly more to acquire a new customer than it does to keep an existing one. Improving customer retention starts with building customer loyalty…and that comes from increasing customer satisfaction.
Satisfied customers buy more, shop more often, and refer their friends. While a healthy acquisition program is important, improving current customers’ satisfaction levels and building loyalty protects your share of their business.
Here are 10 ways to improve customer retention by showing them you care about their satisfaction:
1. Ask their opinion.
Customers will tell you what they think about all types of things, sometimes unprompted but often only after you ask. Conduct surveys or focus groups to hear their opinions on current products and gauge interest in potential products. Measure their assessment of your service to identify what you’re doing well and what you can do better. What you think is happening may be something entirely different from what your customers—especially your best customers—are experiencing.
2. Improve your product.
People value companies that keep striving to be better, and product improvements present a marketing opportunity as well. Crunchier, cheesier, chewier. Faster, more efficient, more options. If you’ve identified a way to ratchet it up, do so and tell customers you’ve done it. If you haven’t, keep looking. More of a good thing is better.
3. Reward their loyalty.
Want to build customer loyalty? Acknowledge and thank customers for demonstrating it. Offer special coupons or events available only to existing customers. Establish a loyalty program where customers can earn “points” toward a tangible reward. Honor birthdays and business anniversaries with a thank you and a special offer. Active rewards programs can help counter pushback from those unhappy about what you’re offering to new customers as part of your acquisition strategy.
4. Fix internal processes.
One of the greatest frustrations for customers is when employees say “Our system can’t do that.” If your point-of-sale system or website causes confusion for customers, it’s time to make a change. The same goes for communication and training. It’s very frustrating to attempt to redeem an offer or coupon and find employees who don’t know what to do with it.
5. Evaluate employee incentives.
The behavior you incent is what you get, whether that’s in the best interest of the customer or not. Maybe you’re driving sales or adding margin or increasing average ticket and that’s exactly what you need. But before you chalk up your strategy as a success, take a step back and observe how customers are reacting. Are you creating negative feelings in those who choose not to buy? Could some employees be taking the strategies too far? Are there potentially harmful long-term effects to your business?
6. Provide a memorable shopping experience.
Customer experience has become increasingly important as consumers and business buyers both have a multitude of options. It doesn’t take a big budget and cutting edge technology to make customers feel you care about them…although these certainly generate a lot of buzz. What people remember most is how you made them feel. So…
7. Assess your training programs.
The interactions customers have with employees have a bigger impact on how they see your brand than any form of advertising or PR you do. Make sure you’re equipping employees with the tools, information, and encouragement they need to provide top-quality customer service. Do you have safeguards in place to identify where there may be learning gaps?
8. Stop overmarketing.
How often are you touching your customers, especially with emails? You may be in danger of being completely tuned out. Segment your database and test different cadences. Access past purchase and browsing data to send relevant offers to each customer at intervals they want. Offer alternatives for less frequent or more specific messages when customers unsubscribe.
9. Evaluate your corporate responsibility program.
If you don’t have one, develop one. While policies that demonstrate your company’s values and priorities have always been important, this became a hot-button issue when millennials entered the marketplace. Given the turmoil of 2020, committing to specific actions and standards is important to many customers. Make sure you are listening to and investing in your customers’ — and your employees’ — communities.
10. Keep an eye on the competition.
Competitors will always be willing to step in and pick up where you are dropping the ball. Know when they have new products, special prices, and bells and whistles to woo your customers. Invest in research that provides insight into what’s happening in your industry. However, don’t be distracted from delivering the positive experiences your customers expect from you. It’s up to you to make sure they are so satisfied they’ll have no reason to look elsewhere.
When you improve customer satisfaction, you are also building loyalty, the key to retention. Make sure you have the right measurements in place and don’t get complacent. All of your customers’ experiences with your company demonstrate how you value their business, whether or not that was the intention.