Understanding The Buyer’s Journey 2; Customer Retention
In the previous blog post, we discussed the 3 stages of the buyer’s journey; The awareness stage, the consideration stage, and the decision stage. We also discussed ways by which you can help your prospects at every stage of their purchasing decision journey in order to move them from prospect to consumer. In this blog post, we will be moving further to discussing how to bring the consumers to the stage where they are customers which is Customer retention.
New customers are essential for businesses but what’s the point of acquiring new customers if you don’t know how to retain them? The more loyal customers you have, the faster you can achieve your business goals. The guide, Marketing Metrics, explain that you only have a 5-20% chance of selling to new buyers but a 60-70% chance of selling to your existing customers.
Difference Between Customer Acquisition And Customer Retention
Jordan Ehrlich defined Customer Acquisition as the process of bringing in new customers – or convincing people to buy your products. It is a process used to bring customers down the marketing funnel from brand awareness to purchase decisions. While customer retention is defined in marketing as the process of engaging existing customers to continue buying products or services from your business.
Importance Of Customer Retention
- Increases Revenue: customer retention enables you to retain customers for the long term and make repetitive purchases of your product or service. This increases the overall profitability of your business.
- Reduces cost of promotion: This is one of the major importance of customer retention. Customer retention cuts down the marketing and advertising budget of your business. If you are able to retain sufficient customers for the long term then you will have less focus on acquiring new customers unlike having to get new customers at all times. The cost of acquiring new customers is much more than the cost of retaining customers.
- Reduces Competition: Competition from rival companies is one of the major challenges faced by every company. Customer retention helps in lowering the competition effect on your business. Your business will be able to develop more loyal customers through its customer retention programs. These loyal customers do not switch to other brands easily no matter what offers the rivalries are providing to their customers.
- Provides More Referrals: Having loyal customers helps to increase your customer base by providing more word-of-mouth referrals. These customers refer your brand to their relatives, friends, and others.
- Enhances your brand image: It enhances the overall business in the market and creates goodwill. New customers easily get attracted to businesses with goodwill and customer loyalty programs. By serving your customers in a better way your brand image is enhanced.
Customer Retention Best Practices
- Make your customer experience your top priority: Ensure the processes your consumers go through are as seamless as possible. You can check our previous article on Understanding the buyer’s journey Part 1 on how to help your consumers at various levels of their purchase journey.
- Offer excellent customer service: customer service can be seen as an opportunity to leave a good impression on customers by dealing efficiently with their questions and ensuring that they end up being happy with your service. Unhappy customers who have experienced poor service will not only become ex-customers, they often tell other people about it. It is important to respond to complaints instantly and help proffer solutions, it will go a long way to enhance your brand image.
- Ask for feedback: Many businesses lose resources when they don’t listen to their customers. It’s always a good move to ask for your consumers’ opinions. Let your customers know how much their thoughts matter to your business. Their feedback can help you keep brand perception in check, deliver exceptional customer service, and ultimately increase retention.
- Keep your product or service top of mind: You can’t stop marketing to someone just because they’re a customer. In today’s marketplace where competition is high and loyalty is low, you must stay top of mind. You can do this via any number of techniques and strategies. Good options include weekly email newsletters, running contests on social media, and producing high-value content (like videos, podcasts, or downloadable PDF resources).
- Create a customer loyalty program: A customer loyalty program is a marketing approach that recognizes and rewards customers who purchase or engage with a brand on a recurring basis. If your customers know they’ll be rewarded for returning to your store, they’ll feel compelled to do so. Offer something of value.
- Create great content that educates: Lots of people buy products and services from companies because those businesses are willing to educate their audiences. If you consistently share amazing content, your customers will come back for more. Part of this phenomenon revolves around staying top-of-mind. If your business is the first thing a person thinks of when your niche comes up in conversation, you’re doing your job extremely well.
We have come to the end of the topic ‘Understanding the buyer’s Journey’. Any questions or contributions will be welcomed in the comment section below.