Everyone knows that it’s less expensive to retain existing customers than it is to acquire new customers, so why do so many small businesses make chasing after new customers their top priority? I would argue that attracting new customers is more straightforward than keeping existing customers and cultivating them into brand advocates, which is why so many businesses favor this strategy.
To attract customers, you put your name out there and let your products/services compete with the rest of the market and if you make a compelling enough case, searchers will choose your company. It’s that simple. But when it comes to customer retention, there are so many questions swirling in the heads of business owners... Should you send promotional offers to existing customers? If you do send them, how often should you do so? Can you ask for follow-up information to target future correspondence? How will this targeted correspondence be perceived? Will all of these efforts lead to positive ROI or just be a waste of time?
It’s this fear of the unknown that scares some businesses off. So let’s de-mystify customer retention!
To attract customers, you put your name out there and let your products/services compete with the rest of the market and if you make a compelling enough case, searchers will choose your company. It’s that simple. But when it comes to customer retention, there are so many questions swirling in the heads of business owners... Should you send promotional offers to existing customers? If you do send them, how often should you do so? Can you ask for follow-up information to target future correspondence? How will this targeted correspondence be perceived? Will all of these efforts lead to positive ROI or just be a waste of time?
It’s this fear of the unknown that scares some businesses off. So let’s de-mystify customer retention!
When it comes to keeping customers, businesses need to follow the TRUST model:
Targeting
Targeted emails are generally appreciated by consumers because it puts content in front of them that they have an interest in or a need for rather than presenting generalized information that may or may not appeal to them. This is why many businesses craft targeted emails and newsletters based on purchase and browsing history. This is also why businesses address communications to people individually. Opening an email or getting a call that is directed specifically to you creates the basis of a bond with a company that the rest of the content can rest on afterwards.
Respectfulness
Respecting the time and privacy of your customers is important because it shows that you care about them as people, instead of just viewing them as an opportunity to make money. Sending too many emails or sharing customer data with partners is viewed as disrespectful and will likely lose you future business. Conversely, respecting customers is a great way to build a lasting relationship and increase the lifetime value of a customer.
Understanding
Understanding the wants and needs of your customers allow you to better understand your customer profiles, which is why it is a great idea to let customers define their interests and tell you about themselves. Having customers opt into specific types of communications or self-identify is the best way to do this. (For instance, if you sell sports apparel and shoes, letting customers select the sports that they participate in and which newsletters they want to receive ensures that you will not send them communications that do not fit their needs.) Knowing that needs can change, you should also provide the option to update these preferences at any time. Your brand image and ROI can both benefit from this practice, which is a win-win.
Smarts
Taking the time to plan and execute retention efforts properly will give you more complete data. Better data means smarter decision-making! Embed tracking links in emails, create channel specific promotional codes, and so forth to ensure that you can collect the data needed to evaluate the effectiveness of your efforts later on.
Transparency
Asking for customer feedback can provide absolutely invaluable information to aid in your retention and loyalty efforts, but people are hesitant to provide feedback if they have doubts about how it will be used. Be transparent any time you ask for anything from your customers! Let them know why you’re asking, what you will do with the information once you receive it and why it’s beneficial for both them and you to have that information.
Kate Pierce is the owner of LionShark Digital Marketing LLC, a West Michigan internet marketing company. Her areas of expertise include Paid Search, Search Engine Optimization, Social Media, Web Consulting for small businesses, Copywriting and Local Online Marketing. She lives in the Grand Rapids area with her husband and enjoys cooking, watching sports and spending time outdoors. Like a true digital marketing expert (i.e. geek), she loves talking about marketing theory and SEM trends… so don’t say you weren’t warned!
Targeting
Targeted emails are generally appreciated by consumers because it puts content in front of them that they have an interest in or a need for rather than presenting generalized information that may or may not appeal to them. This is why many businesses craft targeted emails and newsletters based on purchase and browsing history. This is also why businesses address communications to people individually. Opening an email or getting a call that is directed specifically to you creates the basis of a bond with a company that the rest of the content can rest on afterwards.
Respectfulness
Respecting the time and privacy of your customers is important because it shows that you care about them as people, instead of just viewing them as an opportunity to make money. Sending too many emails or sharing customer data with partners is viewed as disrespectful and will likely lose you future business. Conversely, respecting customers is a great way to build a lasting relationship and increase the lifetime value of a customer.
Understanding
Understanding the wants and needs of your customers allow you to better understand your customer profiles, which is why it is a great idea to let customers define their interests and tell you about themselves. Having customers opt into specific types of communications or self-identify is the best way to do this. (For instance, if you sell sports apparel and shoes, letting customers select the sports that they participate in and which newsletters they want to receive ensures that you will not send them communications that do not fit their needs.) Knowing that needs can change, you should also provide the option to update these preferences at any time. Your brand image and ROI can both benefit from this practice, which is a win-win.
Smarts
Taking the time to plan and execute retention efforts properly will give you more complete data. Better data means smarter decision-making! Embed tracking links in emails, create channel specific promotional codes, and so forth to ensure that you can collect the data needed to evaluate the effectiveness of your efforts later on.
Transparency
Asking for customer feedback can provide absolutely invaluable information to aid in your retention and loyalty efforts, but people are hesitant to provide feedback if they have doubts about how it will be used. Be transparent any time you ask for anything from your customers! Let them know why you’re asking, what you will do with the information once you receive it and why it’s beneficial for both them and you to have that information.
Kate Pierce is the owner of LionShark Digital Marketing LLC, a West Michigan internet marketing company. Her areas of expertise include Paid Search, Search Engine Optimization, Social Media, Web Consulting for small businesses, Copywriting and Local Online Marketing. She lives in the Grand Rapids area with her husband and enjoys cooking, watching sports and spending time outdoors. Like a true digital marketing expert (i.e. geek), she loves talking about marketing theory and SEM trends… so don’t say you weren’t warned!
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