Do you know what’s better than acquiring a new customer? No, the answer isn’t “two customers.” It’s retaining a repeat customer!
In my last post, I showed you the stats on customer retention, and they’re hard to ignore: increasing your customer retention rate by just 5 percent can increase profits by 25–95 percent! The question about the importance of customer retention is no longer in doubt. The new question now becomes, “how can I keep my current customers happy?”
Here are 5 customer retention strategies your business can implement to increase loyalty and engagement. From loyalty programs to employee satisfaction, these tips will ensure that you keep your existing customers coming back for more.
- OFFER A LOYALTY PROGRAM THAT MATTERS
A great way to increase customer loyalty is by rewarding customers for specific purchases and behaviours. However, it isn’t a guarantee; if you offer the wrong rewards, or make the rewards too difficult to earn or use, you will end up losing customers. In many cases, ease-of-use and ease-of-redemption are more important to customers than the actual rewards. 57 percent of customers abandoned a loyalty program because it took too long to earn points or miles for rewards, according to the 2017 Colloquy Loyalty Census.
Customers want to enjoy using a loyalty program. They don’t want to feel burdened or frustrated by complicated processes, nor do they want to feel like they are jumping through hoops just to get a minuscule reward. So what is the best rewards program?
An open-loop, reloadable prepaid card is a great way to keep your customers happy. The cards are great for a wide variety of programs, such as rebates, contests, prizes, referrals, etc., making them an all-in-one loyalty device. The cards conveniently store all of the funds in one place, and payouts can be made instantly. A prepaid card is also beneficial to your company because you can track your customers’ purchasing habits. With tracking comes data, and you can use this data to personalize and tailor your products, services, and offerings to meet your customers’ needs. Which brings us to #2….
In order to retain your customers your business must know them. A loyalty program that offers data collection (see #1) allows a business to personalize offers to best meet the wants and needs of their customers. According to Virtual Incentives, 56 percent of consumers said receiving a personalized incentive would improve their consideration of a brand.
Having a better understanding of your customers and their interests will help differentiate your business from the competition. A personalized loyalty program is a great way to increase retention, improve brand visibility, and deliver free word-of-mouth advertising.
3. LISTEN TO YOUR CUSTOMERS
It’s important that you listen to feedback from your existing customers. According to a survey by Appentive, 97 percent of consumers said they are somewhat likely to become more loyal to a company that implements their feedback, while 55 percent of consumers said they are not likely to continue being a customer of a company that ignores their feedback. 80 percent of people who stop doing business with a company felt the company could have done something to retain them. So listen and talk to your customers! With social media now a ubiquitous form of communication, customers can openly share real-time reviews and feedback on products and services. Blogs, social media updates, and emails are awesome methods to communicate with your customers and provide them with useful information.
4. CONNECT WITH THEIR VALUES
Cost is no longer the only driving force behind consumer purchases; shoppers also want their money to go towards a good cause. Consumers are interested in doing good–saving the environment, improving education, helping impoverished third-world nations, etc.–and their buying habits are motivated by more than just consumption. 65 percent of shoppers will choose to make purchases from a brand whose values–and the actions of their company leaders–align with their own. This is especially true for Millennials, who will research companies to check their values and sustainability efforts before actually making a purchase. For your company to stand out, it needs to build its marketing around an altruistic message that it actually believes in. Find something your repeat customers care about and put your brand behind it!
5. HAPPY EMPLOYEE = HAPPY CUSTOMERS
Each year, the estimated worldwide cost of customers switching due to poor service is $1.6 trillion, according to Accenture. 47 percent of customers would take their business to a competitor within a day of experiencing poor customer service. According to a study conducted by Demand Metric, companies with employee engagement levels of over 50 percent (which is high) retain over 85 percent of their customers.
Companies using incentive programs reported a 79 percent success rate in achieving their established goals when the correct reward was offered. Properly structured incentive programs can increase employee performance by as much as 44 percent. Organizations with higher than average levels of employee retention and engagement realized 27 percent higher profits, 50 percent higher sales, 50 percent higher customer loyalty levels, and 38 percent above-average productivity. A prepaid incentive program is a great way to reward employees and increase loyalty to your company. A customizable, branded prepaid card is the perfect tool to offer bonuses, rewards, referrals, and more. Offering your employees a reward they will actually care about–and that they can use to buy whatever they want–will ensure that they work hard to keep your repeat customers happy.
Customer retention isn’t an overnight fix, however, but these strategies can ensure that you keep your customers coming back for more (and more, and more…). The most important customers are the ones a business already has, so make sure you keep your repeat customers happy!
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This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.