3 Principles of Customer Retention – i♥marketing (Part 7)
Editor’s Note: Our recent regional i♥marketing user conference included six rapid-fire sessions on best practices for each stage of the customer lifecycle: Attract, Capture, Nurture, Convert, Report, and Expand. This blog post covers the key points of the Expand rapid-fire session.
You’ve identified the lead. You’ve nurtured that lead until they became an opportunity. You’ve provided case studies and customer references, and helped your sales team close the deal. Your customer acquisition efforts paid off, and they’re over.
Congratulations! You just crossed the starting line with your customer.
Your job as a marketer doesn’t end with acquiring a customer; you’re still in the nurturing business. You are, however, switching from nurturing a lead to nurturing a customer.
Retaining your good customers is the most effective and least costly way to increase your profits. Conversely, you could lose up to 50% of your customer base over a five-year period without making an effort to maintain those relationships, which are far more personal than your relationships with leads. These are the people who prove they like and trust you by giving you money on a regular basis.
Customer retention is a great way to ensure that you will be in business long-term.
Frederick Reichheld, Loyalty Expert at Bain & Company, compared customer retention vs. customer acquisition costs, in an article published in the Harvard Business Review. Two of the key findings from his research and analysis:
• It costs 6 or 7 times more to acquire a customer than it does to retain one
• If you boost your retention rates by 5%, you’ll increase your profits by 25-95%
Many of the same principles from lead nurturing also apply with customer nurturing. Except now, instead of focusing on the buyer’s journey, you’re focusing on the customer’s journey — their experience with your product, service, company, and brand, and how they feel about those things.
Expand the customer’s relationship with your company
EXPAND focuses on building relationships throughout the customer lifecycle. This includes onboarding information, training resources, education and best practices, as well as opportunities to turn current customers into loyal advocates.
There are three key principles to creating lasting customer relationships.
1. Survey regularly, and respond accordingly. Pay attention to what your customers are telling you, and be thoughtful about addressing their concerns
2. Use multiple channels for regular engagement. Remember that relationships involve dialogue, not a series of monologues. Engage with your customers where they are, on their terms and with their preferred method of communications, whether that’s email, over the phone, or on social media.
3. Analyze and anticipate your customers’ needs. Listen to what your customers are telling you about their challenges, then design campaigns and services to help solve their needs.
A final note
Keep your customers informed of your product and service updates, and prevent unpleasant surprises. If ever you have bad news to deliver – a price raise, a product recall, a toxic story circulating in the press – make sure they hear it from you first. Treat them with respect, and you’ll keep their appreciation…and their business.
Happy customers can turn into loyal customers and vocal advocates. All it takes is a little nurturing.