It is no secret that acquiring a new customer is far more expensive than retaining a customer, and yet most entrepreneurs invest more resources in acquisition rather than retention. So, even though new customers are coming in, businesses tend to lose out a lot of old ones along the way.
For all businessmen, when you are planning your next budget, you may want to shift some proportion of your marketing budget into retention strategies. So, how do you go about it? Let us find out:
(1) How do you increase the customer lifetime value? Primarily there are three strategies.
(a) The first strategy involves increasing sales per order – your job is to encourage your customers to spend more money on every order they place with your company.
(b) The second strategy is to increase sales with time – unlike in the first strategy, where you increase the individual transactions, this second strategy implies on the total number of transactions.
(c) The third and final strategy is about decreasing the costs for your customers – this involves packaging costs, shipping costs, customer service call rates, everything that involves serving the customers.
(2) Now that you’ve got your strategies up straight, you’ve to plan your implementation tactics. You have to turn strategies into actual action. You can do that in the following ways:
(a) Communicate and connect with your clients about your business on a regular basis. Brand is built over years by developing trust, loyalty and advocacy. This needs consistency in quality, demand fulfillment and commitment. Email marketing, gift coupons, social media platforms and an efficient customer service department.
(b) Stop with those mass-generated advertising techniques. Personalize your content, and offer you customers with specific products that may not cater to the entire customer base.
(c) You should be able to reward your customers for their loyalty by giving them exclusive discounts and perks. It is important to make them feel like you care about them so that they keep coming back.
(d) Make sure you focus on little details like packaging, presentation, feedbacks, websites, app functionality, etc.
(e) Engage with your customers. Send your customers with emails telling them about any latest products or offers and discounts.
(3) What most people don’t realize it the importance of measuring customer value. Businessmen limit themselves to sales data. They should be tracking and measuring customer lifetime value as well, which gives a score on how recent they have been with their purchases, how many purchases have they made, and of what value. The higher the value, the more efforts you put into retention because they are considered to be god customers.