Selling products and services to a new customer is challenging, of course, but the real challenge is how can you continue to sell into that customer and keep them for a long time? How can you get them to come back and purchase from you again and again? How can you get them to refer more customers to you? That's really the customer experience. And so, let's talk about customer retention and how doing that can really increase a customer lifetime value.
Lifetime value just basically means how much revenue does a single customer generate over their lifetime. If you're just selling it to them one time, if they send no referrals and never buy from you again, that's not as exciting as somebody that's going to continually purchase from you into the future. To do that, you need to really retain your customers and grow your customers long-term.
Tip Number One
Set up and use a CRM. If you're not currently using a CRM, you definitely should look into it. CRM means customer relationship management and so that, in and of itself, essentially means investing in the relationships of your customers to grow them into long-term, happy customers and retain those customers.
Well, if you really do it right, CRM could also stand for customer revenue multiplier, if you really use it to its fullest extent. And so, you can do a lot of stuff in a CRM. You can keep notes about them personally. You can keep reminders in there to reach back out to them at key points in the process where it might make sense for them to buy from you again. You can put email automation in place so that it automatically is communicating to your customers for you via email, maybe on holidays for promotions.
Depending on your type of business and industry, you have these key trigger points through the lifetime of the customer where it makes sense to maybe buy from you again, or to upgrade or to buy additional products and services, and those sorts of things. So, if you use a CRM properly, you can automate a lot of that and really increase the lifetime value of your customers.
Tip Number Two
Leverage email. And I just touched on it in tip one, but to elaborate a little more, think about an automated campaign that makes sense for your customers. When are you going to want to send them emails? Sometimes it could just be a thank you for being a great customer. Sometimes it could just be a, say, "Hey, Merry Christmas". Think of those sorts of things. Send them birthday emails, show them some love through email.
Think of this in advance.
- What is an automated journey that makes sense for your customers?
- What times of the year should you email them and what should you email them?
Sometimes it's just tips, adding value, giving them educational content. You're not asking for a sale; you're just providing value. The more value you provide, the more the customer has a good feeling about you and wants to spend more money with you long-term.
Tip Number Three
This should be an obvious one, you would think, but it's provided great customer service. Customer service is just so huge. So many small businesses focus on the acquisition of customers. They throw them over the fence and then they don't spend a lot of time on customer service.
It's really, really important to focus on that because, if you provide great customer service, people are going to stay with you longer, and they're going to refer their friends. It's really beneficial to your business, so have a culture that invests in customer service and taking care of the customer. It's invaluable to your long-term success.
Tip Number Four
Offer incentive programs or win-back programs for your customers. Give them a reason to come back. Have an incentive program put in place. When you lose a customer, provide an incentive for them to stay. Or maybe you did lose a customer and provide incentive for them to come back. Or maybe you have a business that sells to customers in a one-time basis. You don't really have a recurring type of customers. Have incentives for them to come purchase from you again, additional products and services.
Maybe the initial product has a lifetime expectancy. Have a reminder to reach back out at that point in time to get another sale from them. Incentive programs are a really great way to provide good retention of your existing customers, but also to get your customers' lifetime value to increase over time.
Tip Number Five
Have a loss leader. What a loss leader means is, it's basically something that you're willing to lose a little bit of money on for the potential of gain. And so, an example of that is maybe a year after somebody is your customer, you send them a gift card to say "Hey, thank you". Here's a $5 gift card to Starbucks. Now that's a loss leader because that cost you $5. But the thing is, is the value that that brings to them, just the good will that they feel from you that's generated from that will probably either, A, get them to come back to you at some point in the future, which you're probably going to make a lot more than five bucks, or refer a friend, which is also going to generate a lot more revenue than five bucks.
So it's a risk that you're taking, which is why they call it a loss leader, but oftentimes it's like a line in the water that actually catches a fish, and you end up seeing a really strong return.
Tip Number Six
Ask for feedback and then to actually listen. The thing here is, your existing customers are the best folks to ask for feedback because they've experienced your whole process, they've experienced your product and your service, probably worked with your team, so they're going to have a lot of great feedback that they can provide to you that's going to help you get better. But the thing is, you have to ask for it, and then you have to actually listen to it and make adjustments to improve. If you ask for feedback but you don't actually do anything with it, it's not going to help you improve your business and improve client retention.
Tip Number Seven
Our last tip, it's to stay on a first name basis with your customers, especially your VIP customers. You want to have a relationship with them, actually get to know them. Instead of looking at your customers as just a huge bucket of people, actually see their individual names and faces. This is going to get you excited about actually helping add impact and value into them and their lives.
Get to know them and, by doing so, you're going to learn a lot of things, and you're going to have that fuel that drives you to want to really grow relationships with other customers, which all that ends up doing is improving your overall customer experience. And, if have an unbelievable customer experience, people are going to stay longer, they're going to refer their friends, and you're going to see an increase in customer lifetime value.
So that's it, there's seven tips. I'm sure there's about a billion more. So, if you like the article and you have some different tips in mind, please leave it in the comments. Like the article but have no tips? That’s ok, share it with your friends, and thanks for reading!