Estimates and research vary with many varying sources giving varying statistics, however there is no questioning that selling to existing customers is much easier and therefore cheaper than selling to new customers.
According to Marketing Metrics the “probability of selling to an existing customer is "60 – 70%. The probability of selling to a new prospect is 5-20%”
John Fleming and Jim Asplund, conducted a research that
showed that customer retention has a direct impact on profitability. Research indicates that engaged customers generate 1.7 times more revenue than normal customers. Therefore focusing on returning customers can help you hit your targets faster.
Here are 5 tips to help you increase customer retention rates:
1. Recognise the customers digital footprint
By using various customer touchpoints for your brand you give the customer more means of engagement. Injecting the touchpoints with details that allow us to recognise the customer, is invaluable. Whether registering for your new portal or downloading your app. Having ways to recognise existing customers is key. This can help us see the level of engagement of existing customers vis-a-vis new ones on each platform.
2. Reward them
Reward your clients. Everyone loves free stuff and every Brand has something the customer wants that they can give them for free. Make your customers feel appreciated. Make them feel that you know them and care for them. Merchandise and free on-site gifts can not only turn a new client into a lifelong client but also retain existing clients and encourage them to spend more.
3. Less Friction equals Happier Customers
Abandoned carts, lost passwords, unvalidated credit cards; these are all things that can make a customer abandon a site out of frustration. They are things that stop the customer from doing what they intended to do and therefore can have a negative effect on your profit and engagement levels. A service like Optimizely is a great one for testing forms and making sure everything works as it should. [should we mention specific tools?]
4. VIP Treatment through email
You want to make your customers feel special and stay in their front-of-mind, however the balance between annoying your customers and pleasing them with the right offer at the right time is a delicate one. Tread carefully and always test your offers on a small segment of your audience first.
5. Treat them like friends
Don’t send promotions or re-market products unrelated to their purchases and interactions on your site. Listen to spam complaints and be sensitive to your email list. Treat your email list like friends, nurture them, do not forget they are people with feelings, frustrations and desires just like you. After all the target is to turn them into loyal friends of the Brand.
Social Media Today: 5 Sexy Rules of Customer Retention /