The sale may seem like the most important step in a business transaction, as money changing hands is the instant gratification marketers and salespeople love to see. However, getting a consumer to make a repeat purchase is just as important as piquing their initial interest.
Consider these statistics: 44 percent of companies focus on customer acquisition, while only 18 percent focus on retention. One could argue this system is backward, as it is five times as expensive to gain a new customer than retain an existing one. Further, a returning customer purchases 30 percent more items and brings in three to seven times more revenue per order. Marketing can play a major hand in getting audiences to return, especially through customized experiences, reward systems, and up-selling to existing customers -- proving that it isn't just your customer service team that keeps customers happy.
"Oftentimes, the post-sale phases of the customer lifecycle are considered to be the responsibility of the customer service department, not the marketing department," says Steve Pizzolato, founder, and CEO of AVALA Marketing Group. "You should treat your post-sale efforts as proactive marketing, not solely as a reactive customer service function."
Given retention's growing importance, here are five ways to keep your customers loyal:
1. Leverage your company's mission. Think back to what first prompted you to create your company -- then use that same value and drive to inspire customers as well. Take Soapbox, a body care brand that sets itself apart from its competition through its mission: donating a bar of soap for every product purchased. It follows the one-for-one campaign made famous by TOMS, a strategy that particularly resonates with Millennials, more than 90 percent of whom say they are more likely to switch to a brand that is associated with a good cause.
2. Actively engage in the comments section. Now that the internet is so ingrained in our culture, it only makes sense to use it to your advantage. Engaging with customers online lets them know you are listening, so respond to both complaints and compliments. Sixty-seven percent of consumers use the internet to reach out to brands for their customer service needs, so make the experience helpful and convenient by staying active online.
3. Know the power of rewards systems. Both small businesses and major brands have their version of a frequent flyer card. By providing incentives for repeat purchases, you greatly increase the odds that a customer will come back. Whether it's 10 cents off gas or your 10th cup of coffee free, people love a good deal. Specifically, with Millennials, two-thirds say they will switch to a brand that provides a discount of 30 percent or more.
4. Turn complaints into learning experiences. Many of us have been on the receiving end of an angry customer complaint, and sometimes even we ourselves are the mad patrons. Instead of taking a bad review as a hit to your business, put it in a new light. For instance, Best Buy takes its customers' reviews to heart by making both improvements to its own company and passing on consumer feedback to its vendors. The company has even provided more incentives through giving rewards for reviews, which in turn can be used on future purchases.
5. Over-deliver. We all know the saying "Under-promise, over-deliver." When it comes to a new customer, fulfilling a promise and going beyond what was expected will make them come back and further prove the credibility of your business.
Given the ROI numbers, customer retention is now being seen as a top priority rather than a secondary strategy. By anticipating and responding to your existing consumers' needs, you can establish your business as both reliable and trustworthy and, most importantly, the place where consumers turn first.