By Syed Balkhi, founder of WPBeginner
Marketing professionals around the globe often think about ways they can bring in new customers. Obtaining new customers translates to higher profits. While that statement may be true, there are other factors that you should consider.
Customer retention is another important piece of the marketing puzzle often left on the back burner. An Adobe study titled, "The ROI from Marketing to Existing Customers Online" revealed that keeping a customer around after their initial purchase is well worth the investment. For starters, an average repeat customer spends five times more than a first-time customer.
Customer retention is just as important as bringing in new customers. I'd like to outline how you can use the human mind to keep customers around long after their first purchase. Here's how you can use psychology to improve your average retention rate.
Use the fear of missing out.
FOMO, or the fear of missing out, is a psychological trigger and a popular marketing tactic usually reserved for customers when they are browsing online. It is the fear that something is going to sell out due to limited availability. We all have this fear, and it stays with us in our day-to-day interactions. Sometimes you might not even realize it's happening.
For example, grocery stores will often use this tactic to sell products that they need to get off their shelves. They accomplish this by putting up a "limited stock" of one item, while a similar product may be stacked up right next to the scarce product. Your instincts tell you to go with the item that looks like it's selling faster because you don't want to miss out.
You can apply this same tactic to your products after a customer makes a purchase. Usually, the purchasing process involves a customer signing up with their email address. You could tempt that customer to become a repeat customer by offering exclusive 'limited time' deals on your products.
Build social proof.
The psychology of social proof ties closely with the fear of missing out. People want to make sure that they can obtain a product or service before it sells out, and this is especially true when they see other people enjoying the product they want.
When you're designing your website, make sure you include share buttons with counters so the audience can see exactly how many people enjoy what you're selling. You can also add testimonials, reviews and more.
Combine these elements with active social media profiles where you're constantly retweeting those who tag you in posts or sharing images on Instagram of people enjoying your product or service. The mentality of the customer is "If they are enjoying that product, I bet I will, too!" This thought process encourages the user to make an initial purchase.
You can also use this method to bring in repeat customers by sharing a wide variety of products and reviews from different customers. If they tried the first product and enjoyed it, they are far more likely to purchase a second product if they see other people enjoying it as much as they enjoyed their original purchase.
Rationalize their purchase.
How many times have you personally suffered from buyer's remorse? Regardless of whether or not the product was excellent, sometimes we feel bad about spending money. Your marketing team should work to deliver a quality experience after someone buys something from your website.
There are a few different ways you can help customers rationalize their purchase. A good start is to send (or automate) personalized thank-you emails to customers. This small step will ensure that the customers feel like you value them and their business, which can fuel future sales.
Beyond thanking the customer, you can also send them emails with tips and guides on how they can get the most use from their product. If you want to turn heads in your industry, try offering gifts to customers after a set amount of purchases. It's hard to think about buyer's remorse when you're getting additional gifts and have had an overall outstanding customer experience.
There's no question that psychology plays a role in the buying process. Your goal is to deliver excellent user experiences and encourage first-time buyers to become lifelong customers. As you shape your marketing technique in the future, take some time to think about how you would react to some of your customer retention methods if you were getting emails from another company. When you put yourself in the shoes of a customer, it's much easier to see how the brain can encourage us to remain loyal to businesses that treat us well.
Syed Balkhi is the founder of WPBeginner, the largest free WordPress resource site that helps small businesses start their website.