If you want your customer service to soar, you need to pay attention to metrics.
Speaking of metrics as relating to customer service, it will be worth your while to consider the following:
- Acquiring a new customer costs, on average, five times as much as retaining an existing one
- 80% of future profits come from 20% of existing customers
- 65% of a company’s total revenue comes from existing customers?
There’s more where those came from. And the numbers don’t lie. If you want your business to stay relevant and successful, you need to find ways to keep your customers loyal.
Granted, the process of keeping customers is not as easy as it sounds. But, as the numbers show you, the elbow grease you put into the effort is more than worth it.
But if you need more convincing, allow me to present you with the top reasons why customer retention is still king when it comes to running a business.
1. Saves you money
As already mentioned, it’s way more expensive to acquire new customers than to keep the ones you already have. But let’s double down on that point because it’s an important one.
Every business has a specific budget, and every business owner has to invest every dollar wisely.
And one way to do that is to allocate a significant amount of your budget to customer retention campaigns.
When customers are happy and loyal, you’ll find that it doesn’t take much to urge them to continue buying your products and services. As such, you won’t need to spend so much on your outbound marketing campaigns.
To put a finer point on it, the process of keeping your existing customers happy and loyal is the best investment you can make.
2. Loyal customers make great brand ambassadors
Let’s repeat the subheading above for further emphasis — not only because it’s a good one, but also because it couldn’t be truer.
Loyal customers make great brand ambassadors.
Here’s some data to back it up: According to a study by Jack Morton Worldwide, 49% of U.S. consumers say friends and family are their top sources of brand awareness.
People love to talk about their favorite books, movies, TV shows, and their favorite Kardashian. So it’s not in the least surprising that they’ll be as enthused to talk about their favorite brands.
Moreover, people are more likely to believe the words were coming out of a friend’s mouth. People talk, and if you consider the extensive reach of social media, then you can get a pretty good idea of how powerful referral marketing can be when it’s integrated into your retention campaigns.
3. Happy customers spend more money
Existing customers are 50% more likely to buy new products and spend 33% more than new ones.
That’s to be expected because existing customers are the ones who already know what to expect from your business.
In response to that, you (as the business owner) should be able to identify customers’ pain points through their transaction records as well as their social media posts.
Current customers already have a business relationship with you, and keeping that relationship mutually beneficial should be central to your retention efforts.
4. Retained customers provide valuable feedback
Customers tend to be more loyal to brands that are willing to listen. In fact, 97% of customers said they are likely to be more loyal to a company that implements their feedback.
Simply put, existing clients will respect your brand more if you’re taking their opinions and suggestions into account.
So make sure you have systems in place for gathering customer feedback. By doing so, you get to acquire valuable information that can help you improve your product or service.
After all, customers are in the best position to provide valuable suggestions or advice. They are your target market, and by providing for their needs, you are giving your company good reasons to stay in business.
If you have no clue as to how to properly invest in a nurture campaign, you’ll be happy to know that there are a plethora of third-party companies that have the expertise and the technology needed to optimize your customer retention efforts.