Did you know it costs five-to-ten times more to acquire new customers than to retain existing ones? As small business owners continue to seek new ways to grow their businesses, it has become clear that more growth potential lies in a business’ existing customer base rather than new customers. In this series, we will cover three key elements to unlocking the potential of your customer base, connecting with customers, adding value, and utilizing technology.
Connecting with Existing Customers
Recent studies show that acquiring new customers can cost up to ten times more than retaining an existing one. Small businesses may spend valuable time and money to understand and employ print and digital advertising, paid web search, SEO management, and other marketing tools in an effort to gain new customers with little-to-no payoff.
Not only is it expensive to acquire new customers, but it is also unlikely that a new customer will spend as much as a returning customer. As a result, surveys show that many small businesses are now spending over half of their budget on their existing customers.
As a small businesses owner, it’s likely that you already understand the importance of customer retention. You may even be among the many business allocating the majority of your budget to keeping existing customers, but how should you spend that money?
One key element to customer retention is communication. Connecting with existing customers, in an effective way, can help build customer loyalty and increase revenue. On the other hand, invasive or annoying communication from businesses can turn customers away.
Here are three main ways to achieve the right balance in effective customer communication:
Keep it simple
Offer customers one easy solution for communicating with and about your business. A mix of mailers, phone calls, emails, text alerts, and social media updates can be overwhelming and frustrating to customers, not to mention ineffective. Providing one avenue of communication between you and customers reduces the friction and allows you to maintain a one-to-one connection with your existing customer.
Give them a voice
Customer communication is a two-way street. Giving customers the ability to control their messaging preferences, as well as the opportunity to talk back to you, will let your customer know they are valued and keep them coming back. Satisfaction surveys and reviews allow you to better understand your customers, which will help you provide more of what they really want.
Studies show that over 90% of adults have their smartphones with them constantly. Connecting with customers through their mobile devices is the most efficient way to reach them today. A mobile app can provide you the simple solution for communicating with customers at any time, in a format they are already familiar with. Send notifications about upcoming promotions, business updates, and product information, and provide satisfaction surveys and links to external review sites for easy access on the go. You can also reward loyal and engaged customers with targeted specific discounts and promotions just for them. A branded mobile app allows you to send targeted messages to customers right in their hands, reducing the need for multiple forms of communication.
Stay tuned for the next part in the series, as we offer tips for adding value for customer.