In a saturated marketplace such as ours where competition is stiff, it makes sense to conserve the customer base that you have acquired. It’s a well-accepted fact: if you service the customers you have, you won’t have to go around hunting for new ones. Yet, sales and marketing people exert effort and expenses in generating leads.
You can sell to an existing customer 7 out of 10 times, but only 1 out of 10 times to a new customer. Plus, acquiring new customers is costly. You can retain present customers at a fraction of this cost, one-sixth to be precise. And here’s the trump card of statistics in favour of customer retention: Gartner states that 80% of all your future ROI will come from just 20% of your customers. Wow, that’s an eye-opener! This means your business can survive (at least break even) just by cross-selling or up-selling to your existing customers. You almost don’t need to onboard new customers.
Are you thinking – this doesn’t concern me, I have a great product and my customers will never abandon me? Then, there’s another bitter pill you’ll have to swallow: no matter how good your product or service is, your customers might leave if they feel neglected. This is why many top-notch products and companies shut down. They just don’t work hard enough to build customer loyalty. In fact, a good 68% of customers say a company’s uncaring or impersonal attitude is a relationship-killer.
The graphic below will prove our point:
So putting things in perspective, we have compiled battle-tested techniques for retention of product customers.
1) Deliver Quality Products: The key to gaining repeat business is delivering top quality products. Nothing works as well as a product that wows with its features. Even if your product is marked higher than competitors, it will reign supreme if it’s a cut above the rest.
Let’s illustrate with an example: Two doorstep service providers, Urban Clap and Yes Madame. Both offer at-home salon services at competitive prices. Urban clap is priced higher than Yes Madame. Yet, it is market share is bigger. Why? The differentiator is service quality. UC technicians are better trained, use branded products, and are punctual and courteous. Granted, UC has the first-mover advantage, but it’s managed to keep up and even beat competition just because of its killer services. Although, the great marketing helps, but remember, even the most radical marketer can’t sell a product that sucks. Do ample market research when creating your product strategy. Understand what your audience needs. Have a long vision plus short-term goals. Never compromise on quality when faced with time or budget constraints. This is a non-negotiable area that every successful product company excels at.
Read More: Is Your Product Really Solving a Problem?
2) Nurture Customer Relations: KPMG in their study found customer retention to be the biggest revenue driver for companies. The secret that many product companies don’t know is that loyal customers are their best promoters. Satisfied customers become brand ambassadors of a company. They campaign unknowingly about the superb experience they’ve had with a company or product they’re using. Their genuine, first-hand account is a marketing billboard in itself. You don’t need to hire expensive influencers for generating brand awareness or leads for yourself. Your happy customers are doing it for you. So, provide excellent customer service. Reward your return customers with gated offers, discounts, and resources. Treat them well and they’ll treat you better. Keep in touch with them via email, newsletters, and your website. Feature their stories on your social apps and website. Make them your family. Involve them in your journey and they will stay till the very end. A practical way to do this is to draw a list of customers who buy from you regularly. Reach out to them via exclusive offers and make them feel special. Another good tip: List out subscribers to your newsletter. These are people who show an active interest in your work but haven’t purchased anything yet. To make them jump boat, send a first-time promotion offer or discounted service/product.
3) Lend a Personal Touch: Personalize all your emails and offers. Rid the assembly line approach of sending mass emails. An Eco consultancy survey has proved personalized offers, based on a user’s purchase history and preference, can surge your ROI to the sky. This infographic compares the business returns of companies using personalization vs. those that don’t.
4) Listen to Your Customers: Some product companies just never stop selling. Every effort of theirs is geared towards the cash register. This is hardly effective as customers, existing or new, don’t want to be taken for a ride. You’ll have to give them something in return. One of the best ways to make the relationship mutually beneficial is to incorporate their feedback into your future offerings. Don’t send lengthy questionnaires to customers asking them for their opinion or experience with your product. Keep it short and simple. Encourage specific, precise feedback regarding what they liked or didn’t like. Try to collate points and factor them into your product strategy. Do keep respondents in the loop, reassuring that their feedback isn’t ignored. When you value your customers’ opinions, they become stakeholders in your business. Your product becomes more aligned to market needs. Your ROI improves and so does your customer satisfaction index.
5) Use a CRM: A CRM system is a handy way to keep track of how customers interact with your product. Draw up metrics of customer inquiries. What bottlenecks are customers facing with your service or product? Are they content with the after-sales service you’re giving? Do you need to improve in some areas? Deeply inspect issues that are reported by the majority of your customers. These have to be resolved on a priority basis. CRM also gives you a sneak peek into how well your sales or customer service staff are working. Disgruntled employees and lackadaisical post-sales staff can annoy a customer big time. This is a serious red flag for any organization and should be attended to immediately.
By now, you must have grasped the impact customer retention can have on the sales and success of your business. Work your magic on your current customers. They are the big fish that’ll act as bait for the other fish in the pond.
If you are looking to build a web, mobile or a cloud product, you can avail of a round of discussion with iView Labs’ tech team. Our developers and project team are always here to help and suggest what is required and necessary for your products.