Many entrepreneurs focus more on acquiring new customers rather than nurturing the relationship with returning ones. Keeping the trust and loyalty of your existing fan base is something that every business that’s in it for the long haul should be concerned about. In fact, 25%-40% of total revenue of most companies comes from returning customers; not only that, but businesses that have around 40% returning clients generate over 50% more income than those with 10%. These statistics speak to the importance of recognizing the value of customer retention, but there’s a problem: entrepreneurs know this, but have difficulty coming up with the right strategy to increase loyalty and lifetime value. For this reason, we have come up with a list of 8 strategies that are supposed to help entrepreneurs overcome this issue.
1. Have a Unified Brand Personality
Companies that have a friendly approach to their customers automatically increase their lifetime value. Why? Because, in the end, we are all just people and want to feel connected. Your buyers are real people, with emotions, needs and different problems, so if you can establish a personal connection with them, they are bound to return. No matter how great your product is, if your image is cold and you seem unreachable, they might buy from you (since you the best), but you won’t really earn their loyalty. In other words, showing your personality and being interested in theirs’ is a foundation for a good company-customer relationship.
Further Reading: The Importance Of Brand Personality
2. Be Upfront and Honest with Your Customers
While selling more products is the ultimate goal, you shouldn’t blatantly try to get a customer to buy if it’s not the best choice for them. Sure, you will increase your short-term sales, but if lifetime value is your objective, take a different approach. This means being honest with your clients, offering advice and showing them that you have their best interest at heart. For example, if they are indecisive about buying a particular thing, advise them truthfully. If this is not something they would benefit from or you can offer them a better alternative, let them know. Your customers will appreciate the honesty and helpfulness, so next time they need something, you will be their first choice.
Further Reading: Brand Honesty: Why and How It Pays to be Truthful
3. Listen to Customer Feedback
Reviews and customer impressions are one of the most valuable assets for increasing value of your products. Your users should be encouraged to give feedback and honestly express their opinion. Knowing how they feel about your company and its products will allow you to make changes that they will appreciate. The worst thing you can do is read feedback and dismiss it. In this case, progress is a collaborative effort – customers give you feedback, you apply it in the future, they are satisfied with the results and everyone wins.
4. Provide Exceptional Pre & Post-Sales Support
Not knowing where to turn to if you have doubts about a certain product, complaint or a question is what makes businesses lose customers. You need to always be available to them. Being active on social media is an essential part of running a successful business at this day and age.
Another thing no one likes is having to wait. If I send you an e-mail regarding a product and have to wait a week for your answer, I will most likely become very irritated with your customer service. This is only one of the examples, but my point is – whenever customers need you, be there. Communicate via social media, be present and, above all, give answers that are actually valuable to your users. Unhappy customers are 5 times more likely to spread the word about their negative experience, so you don’t want to leave a bad impression.
5. Always Maintain Your Product Quality
Often I see businesses that start off great, but over time, there will be a big decline in the quality of their merchandise and customer service. Whether it’s the budget, wanting to attain bigger income or simple laziness, it never pays off. Just because you have a solid number of customers doesn’t mean that you can start neglecting quality. Customers always notice it, at which point they can just as easily move on to a different brand.
I know a guy who opened a fast food restaurant. At first, things were going great, but he started using meat of poorer quality, the service became slower and, gradually, fewer people came to eat there. Eventually, he had to close it because he stopped generating profit. Do you see where I’m going with this? No matter how big or small your business is, when you set a standard, you have to stick to it.
6. Reward your Most Loyal Customers
Whether it’s gifts, discounts, coupons or special offers, awarding your loyal fans is one of the most effective ways to show your appreciation for their trust. Here’s another piece of advice: studies have shown that discounts decrease the value of the product in the eye of the buyer, while free gifts maintain the perceived value. With that in mind, you might want to save discounts for acquiring new customers and award your existing ones with gifts.
Find out what it is they think is valuable, what they would like to get, what they need and try to meet their demands. They will feel valued and appreciated, which will make them come back over and over.
Further Reading: 25 Ways to Thank Your Customers
7. Up-sell and Cross-sell
Successfully navigating the field of upselling and cross-selling is one of the best ways to generate more profit and convince customers that they are getting great value for their money. If you’re not entirely sure what these two are, here the difference: upselling mean that you are selling more complimentary products for a lower average value of each product separately. For example, in McDonalds, you can get a hamburger, fries and a Coke for a lower price than if you bought all three items separately, but you still spend more money than if you just wanted a cheeseburger and Coke. The whole purpose is to generate more revenue by getting customers to buy something extra because it seems like a good deal. Cross-selling is offering additional bonuses for a particular purchase. For instance, if I buy two cheeseburgers, I get fries for free.
Continually having these kind of offers creates the impression that you are really offering good prices for your products and you are not ripping off the customer.
Further Reading: How to Cross Sell and Up Sell
8. Help customers with something they’re Passionate About
You can assist your customers with something they love doing, even if it isn’t really related to your business. Here’s how Dollar Shave Club did it – they had a campaign called “Sponsor Your Thing.” You would tell them about your passion and they would find a way to help you, whether it’s funding the project or bringing more attention to it. What they did there is they’ve shown their emotional side, that they’re interested in every customer in a personal way and will go out of their way to help them out. This kind of approach creates respect and appreciation from your clients.
Having loyal customers can not only make sure that your company operates for a long time, but will also help you overcome the rough times, because you will have their support. Increasing lifetime value should definitely be on your list of priorities and something to work on, in case you want your company to withstand the test of time.
Further Reading: 10 Ways to Make Customers Fall in Love with Your Business