The goal of any big or small business is to never lose customers. And the numbers offer a compelling reason for small businesses to make sure loyal customers keep coming back.
A whopping 65 percent of a company's business comes from repeat, loyal customers. A mere 5 percent increase in customer retention can produce profits of up to 95 percent.
The key is to not only gain customer loyalty, but also keep that customer relationship going strong. After all, lowering your churn rate, or the percentage of customers that stop using your business during a certain period of time, by 5 percent can increase your profitability by up to 125 percent.
Here are five customer retention strategies for increasing customer loyalty and keeping your customers coming back, for the long term.
Offer stellar customer service
- Gain customer loyalty: A good customer experience doesn't just mean being nice to your customers. Help customers get in touch with you when they need you by clearly displaying your contact information. On Nextdoor, neighbors can directly reach out to you through your Business Page. Also consider offering features like live online chats to make chatting with a human representative even easier.
- Keep customer loyalty: Listen and respond to your customers in a timely manner. Offer solutions that, even if they cost you a little, ensure customer satisfaction and make them want to come back. That customer loyalty will keep them spending money with you, and that's more than worth the one-time loss.
Reward your customers
- Gain customer loyalty: Who doesn't like gifts, discounts, and exclusive deals? 54 percent of consumers say they are likely to do more business with a company for loyalty rewards. Offering a customer loyalty program is a perfect way to both thank old and new customers for their patronage and encourage a next visit.
- Keep customer loyalty: Try to think outside the scope of one-off perks. Keep folks coming back by enticing loyal customers with ongoing, longer-term rewards. These could include bigger prizes for bigger purchases, store points for purchases, and special holiday and birthday reward points.
Offer curated experiences
- Gain customer loyalty: 80 percent of consumers say they're more likely to spend with a company that offers personalized shopping experiences. To cater experiences to new customers, learn as much as you can about their buying behavior and demographics. Then separate them into categories so you can pitch products that are actually relevant to them. Whether it’s offering special deals that are similar to their past purchases or sending a text message instead of a phone call for a pick up, it’s about catering to what your customers prefer to deliver the best experience for them.
- Keep customer loyalty: Continue offering experiences to your loyal customers in a way that doesn't feel canned. Set up tracking and analytics so you can track their behavior in response to your marketing campaigns. Also, use this data to see what customer retention strategies are working and what can be improved. Finally, check in with your most loyal customers with surveys and questionnaires to gain additional insight into their needs and wants.
Ask for customer feedback—and listen
- Gain customer loyalty: At the end of the day, the only way to know what customers really need is to ask. Seek the opinions of your customer base as much as possible, whether by asking in person, on social media, or by encouraging customers to leave recommendations on sites like Nextdoor. These recommendations not only give you information, but they also help promote your business via word of mouth.
- Keep customer loyalty: Really listen! Go above and beyond by making sure customers know you are listening to them. Respond to their comments online or post on your social media about how you implemented customer feedback. And consider running campaigns or contests where you can directly involve customers in the creation of new products. About 40 percent of U.S. consumers become loyal customers of brands that ask them for help in designing and creating services and products.
Keep the shopping experience convenient
- Gain customer loyalty: Take a page from Amazon's book and make the customer experience as easy as possible. Amazon is a leader in offering convenience, offering a huge inventory, easy 1-click ordering, and fast and free shipping, all in one place. Encourage sales by ensuring your customers' shopping journeys go as smoothly as possible. You don't want incorrect inventory or a faulty checkout process to keep customers from finishing their purchase.
- Keep customer loyalty: Think about how else you can make doing business with you simpler and faster. For example, answer questions on social media to spare customers from having to call in to customer support and wade through automated phone systems. And like with Amazon Prime, offer additional conveniences through loyalty programs for your most loyal customers.