Want to increase your bottom line? Focus on customer retention. Some experts say it costs almost five times more to acquire a new customer than it does to retain an existing one. As the only digital agency focused on customer retention, we understand the challenges that affect many of our customers. There are so many priorities with marketing that retention simply does not get the attention it deserves.
In this article we’ll take a look at three things you can do today to improve your customer retention and move toward greater revenue.
First, create a budget for retention.
We often look at retention as a segment of our marketing dollars, or a small part of a larger marketing plan. Retention as a part of marketing efforts can go a long way, but it should not be limited to emails and offers. Having a budget for retention, which could range from 20-30% of your total marketing budget can broaden the scope of resources available for your retention efforts. Once the budget is set, the challenge changes from picking the “silver bullet” for customer retention to finding how many solutions you can include in that budget to meet your retention needs.
Second, read your feedback.
If you don’t currently keep detailed customer data records or any feedback on your customers’ experience, now is the time to start. Collecting customer purchase history, demographic information, etc., helps determine what kinds of outreach need to be accomplished in your retention efforts. Nothing can replace your knowledge and understanding of your customers’ relationship with your product and service. Building quantitative measures like Web stats and metrics, as well as qualitative measures such as surveys and interviews gives you a more complete picture of your customers and their needs.
Third, identify your best customer.
Knowing your best customer will help you understand when and why you are retaining customers. Retention is not a 100% target. It’s about keeping the customers that keep you growing. Keeping the customer that you make no money from is going to be a huge waste of energy for you and your company. Nurture your best customer, and grow your other customers to follow the same path and habits of your best customer. This is the ideology behind a retention program. You have the responsibility and opportunity to nurture and grow your customers once they have purchased their first product, and there is no better indication of “how” then with using your best customer as a benchmark.
Today is the day to start making room for your customer retention programs. Maybe you have the ideas, but need help executing them? That is where New North can really help you get the most out of your marketing dollars. Contact us today for a free consultation.