As SMB owners, you're probably well-aware of word-of-mouth marketing. One happy customer refers another customer who goes on to refer another one, and so on and so forth. By providing a delightful customer experience, people remember these positive interactions and eventually return to your business. These are some of the core fundamentals that make up Inbound Marketing.

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Not to put Brian Halligan and Dharmesh Shah on the spot, but, how we can measure this process? How do we know that this approach works? We're told that it's more beneficial to retain a customer than it is to acquire a new one, but where are the facts supporting this claim?

Fortunately, the Inbound methodology is backed by concrete statistics that us skeptics can review. In this post, let's review those facts to understand why customer retention is as important -- if not more-- as customer acquisition. Then, we'll highlight some valuable tips you can use to retain customers at your business.

These statistics make it clear that repeat customers are as, if not more, profitable than new ones. However, obtaining them can often be a challenge for small- to medium-sized businesses. After all, when there are hundreds of competing brands the slightest roadblock can send customers running to a competitor.

So, how can you get your customers to remain loyal after their first purchase? Read on for some best practices you can use to improve customer retention.

6 Secrets for Getting Repeat Customers That Stick Around

1. Remember the information they share with you.

When I was in college, I had a favorite bar that I'd always go to with my friends. Why did I continue to go there every week? Well, the bartenders remembered my name, my favorite drink, and what I was up to that week. It wasn't forced; they genuinely cared about building connections with their customers.

Similarly, you can personalize experiences by recalling details about your customers. For example, if they mentioned their family, ask about them during their next visit. Building a relationship based on what your customers share encourages them to stick around.

2. Use personal forms of communication.

Email is typically the preferred medium for professional communication. It works well for brief notes as well as longer messages and doesn't require an immediate response. However, if email is the only method you're using to communicate with your loyal customers, you might be coming off as too formal.

Loosen up with customers by using communication that's more personal and laid back. For instance, give them a call if you want to discuss something pressing. Or, you can leave a voicemail if you want to meet in-person. Even texting can be appropriate with long-term customers when you want to chat informally. And, using the same forms of communication you might use with friends or family can help customers feel at-home with your business.

3. Share relevant news and information.

Repeat customers often have favorite products. They're open to other ones but don't go out of their way to browse. After all, what's the point? They know exactly what works for them.

You can help them discover new products by sharing news about them personally. Tell them about an upcoming product launch or share some existing products that align with your customers' needs. You can even send them links to relevant blog posts that your company has written. Going above and beyond will continue to engage loyal customer with your brand in new or unexpected ways.

4. Practice excellent customer service.

Naturally, customer service is an important aspect of your business. Your ability to connect with customers beyond their point of purchase demonstrates a complete dedication to their needs and goals.

A common mistake is focusing on new customers over existing ones. The mindset is that current customers are already loyal to your brand and don't need to be wowed by excellent service. Instead, first-time customers need a reason to purchase again so you have to provide above-and-beyond customer service.

Never treat your existing customers lesser than your new ones. It's this attitude that causes customer churn. You should be presenting your best customer service to every customer, regardless of if it's their first or 100th purchase.

5. Maintain a quick response rate.

Along the same vein, quality customer service means being there for your customers when they need you. There are several channels that your customers will use to communicate: phone, email, live chat, social media, and, of course, good old-fashioned snail mail. Your team needs to be present on all of these channels to provide an effective omni-channel experience.

Immediate response times will also take your customer service up a notch and show repeat customers that you're always there to answer questions. After all, 90% of customers rate an immediate response (30 minutes or less) as important or very important to their questions.

6. Create successful customer loyalty programs.

An attractive customer loyalty program can give customers incentive to remain with your brand. But, what makes a customer loyalty program successful? After all, when the program is free and there are no consequences for leaving it, what's keeping your customers around?

According to a study performed by Joseph Nunes and Xavier Dreze, the biggest obstacle companies face is getting customers started with a program. In their study at a car wash, they offered two versions of a loyalty program. Group 1 received a loyalty card that offered a free car wash after stamping eight slots while Group 2 received a loyalty card that offered a wash after 10 slots. However, Group 2's card had already stamped out two of the 10 washes, meaning they only had to stamp out eight more.

Although both groups ultimately needed to stamp out the exact same number of slots, Group 2 had twice the completion rate as Group 1. This shows that when a loyalty program gives customers a head start, they're more likely to follow through and remain loyal.

For more ways to retain customers, read about improving customer experience.

Customer First Templates

 Customer Service Templates

Originally published Sep 4, 2019 8:00:00 AM, updated September 04 2019

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Customer Centric Marketing