“Any business that has delighted customers has a sales force out there. You don’t have to pay them, you don’t see them, but they’re talking to people all the time.” -Warren Buffet
The most important asset that a business possesses is its relationship with its customers. Every company should come to this understanding. It’s absolutely imperative to the long-term success of any brand.
Businesses often forget that, as competition grows more complex and dynamic, the ability to foster customer loyalty becomes more of a challenge. Your customer can always leave and go to your competitor, so it’s crucial to think about what it is you’re doing that keeps them coming back.
Although there’s many factors at play here, the two biggest reasons you want to work to retain your customers are:
- Customer acquisition is quite costly. According to Harvard Business Review, acquiring a new customer is 5 to 25 times more expensive than retaining an existing customer.
- Returning customers spend more, on average, at your business than do new customers; 67% more to be exact.
It’s a whole lot easier to convince a frequently returning customer to either purchase more from you or to buy from you again than it is to convince someone who’s never interacted with your brand before. Furthermore, it’s a lot more efficient and less expensive.
Now you know why caring for your current customers is a good idea and the right thing to do. Yet, if your not sure on how to care for them here are 4 ways you can implement internal business processes that’ll create and foster your customers’ loyalty.
1. Research Your Current Customers
HubSpot summarizes customer loyalty as the willingness of a customer to purchase products and/or services from a business on a recurring basis. But what creates this willingness? Is it a positive customer experience? Is it the value of your products and services? What exactly is it?
This is where good qualitative and quantitative research about your customers comes in handy. Start by asking these questions:
- How much does your customer purchase from you in a year?
- How frequent are their purchases?
- What do they usually buy?
- Can you cross-sell them or up-sell them on other products?
- What is your profit from this customer?
- Are they satisfied with your organization?
- If so, how satisfied are they?
- If no, what can you do to improve your business’ relationship with them?
2. Put Your Customers First With Customer Relationship Management
CRM is more than just software; it’s a strategy. In order to retain your current customers you must constantly improve your customer service. To be able to sell more to your current customers you must keep uncovering their needs. And to be able to close deals faster you must have access to the data you need when you require it, by having the ability to centrally track and locate information.
Customer Relationship Management is all about raising the lifetime value of each customer by putting their satisfaction first. Implementing CRM as a software and as a strategy is the way to attract and actually hold on to your customers.
3. Find Your Target Audience and Create A Budget
You’ve researched your customers, decided to put their satisfaction first and implemented a strategy on how to retain them; Now it’s time to take that info and decide on which customers are the best to target.
So now that you have your target audience the best thing to do is create your budget.
Nucleus Research suggests that the return on your investment in CRM is $8.71 for every $1.00 invested. However, to ensure this kind of return, it’s paramount that your budget is accurate.
Also create one budget for managing customer retention and another budget for generating new customers.
4. Encourage Customer Loyalty
Develop an approach that encourages customer loyalty by relating your strategy to their purchases and to the quality of your business relationship with them. For example, you can use a point system that lets the customer earn rewards. You can also create a sweepstakes give-a-away or a contest to make your loyalty program fun.
People become loyal, not just through product offerings, but through values and belief systems as well. Try sponsoring an event and getting involved in the community; or getting behind a good cause and donating a portion of the proceeds to each customers charity of choice.
Businesses should strive everyday to bring in and keep customers they can continuously exchange value with. The business provides value to them and they, in return, provide value back.
Take care of them and they will surely take care of you. Remember, your brand’s true mission is to discover, develop and maintain a win-win relationship with its most important asset, its customers.