Only a tiny fraction of businesses put retaining customers at the top of their digital marketing goals, even though it's more cost effective than trying to attract new customers, according to a study done by technology news website The Manifest.
The study involved surveying 529 small businesses across the United States about marketing resources and annual budgets and found that only six percent put retaining current customers as a top priority.
Authors of the report attribute this lack of focus to budget shortfalls and to the fact that many of the companies surveyed rely on in-house teams to carry out tasks that would help retain customers rather than outsourcing those tasks.
While some companies likely do have qualified people to perform digital marketing tasks that could help them retain customers, many just go without rather than engaging an agency or a freelancer who could help them with it.
I know how things can be hectic in a new business, especially when it is smaller than 20 people. The founder(s) will have to do pretty much everything and strategic growth and marketing are often luxuries.
Small businesses know they can only be successful if they get new customers, and they believe if they do their job right they should automatically keep their customers. So, to them getting new ones seems to be a safer bet. But, that's not the right approach because it's less expensive retaining customers you already have-- especially if you've already established a relationship with them and you're on the path to getting lifetime value from them.
That said, the report has some suggestions for retaining those customers who are already familiar with a brand, including these three things:
1. Have a clear mission and communicate that.
Beyond just making money, you should have a clear mission for your company. As an example, in our business where we sell drug and health testing kits, our mission is to help keep people healthy, keep workplaces safe and help people avoid addiction. It's something we emphasize in all of our messaging, along with our tagline of "People over profit."
Many of our customers are concerned with health and safety, so they appreciate that we have this clear mission and have told us so in the past. We've had customers come back to us after trying other services because the human element just wasn't there for the clients who went astray.
2. Make customer retention an actual job.
It might be tempting to declare customer retention as everybody's job, but if you do that, it can quickly become nobody's job. Rather, I prefer to actually designate someone to be in charge of customer retention and track their efforts and results.
One of the things your customer retention manager can do is make sure everything is convenient for repeat customers. Streamline your sales process as much as you can for repeat customers. The less they have to do to purchase from you, the more likely they are to do just that.
As long as you don't get too creepy about it, your repeat customers should feel like they have some kind of relationship with your brand. You can facilitate this relationship by personalizing messages, greeting them by name on your website, sending special deals for people's birthday, sending them emails with deals on recommended products based on prior searches and doing other things that show you know your customer.
Order confirmations should come from a named email address rather than a generic one and you should use your employees' photos on your website so people can see who they're dealing with. Try to have real people answer the phone and create the sense that your company has a personality and a soul. As a small business, it's one of the advantages you have over the big corporate monoliths.
A big part of making repeat customers feel valued is to offer deals that only repeat customers get. Many businesses are quick to offer new customers amazing deals, but not offer anything to loyal customers, which can sometimes make long-time customers feel like they're being taken for granted.
We're always looking for ways to reward our loyal customers, which means sending them offers for being long-standing customers. A good way to really personalize something for a customer is to send them an anniversary offer on the anniversary of them becoming a customer (obviously easier to do for B2B clients that perform bulk orders).
To make your money go further for you, think retention over acquisition for customers.