There’s no debating the importance of customer acquisition, especially for new businesses. After all, without customers, there is no business — which is why marketers often heavily focus their efforts and ad budgets on getting people to walk through those doors, either physically or virtually.
At some point, though, companies need to change gears and ensure that customers keep coming back. Here’s how you can shift into a customer retention mindset once your business takes off.
Phase 1: Implement good customer service from day one
Naturally, your top priority when starting a new business isn’t going to be customer retention; it will be user acquisition. While marketing campaigns at this point should utilize smart acquisition strategies, there are still ways to plan for the future by implementing one of the most important factors for retention: stellar customer service.
It’s never too early to focus on customer service. In fact, putting customer-friendly policies and training regimens in place early on will lead to fewer headaches later. Build a reputation on how you treat your customers in good times and bad, and your efforts will pay off down the line.
Phase 2: Give active customers more reasons to return
According to the Harvard Business Review, acquiring customers is usually about five to 25 times more expensive than retaining customers. At some point, it’s simply not cost-effective to focus the majority of your marketing efforts on customer acquisition anymore. This point is different for every business; it could be a few months or a year. There’s no standard timeline, so what’s important is having a general awareness of your customer base and rewarding active customers for their loyalty.
Some of the best loyalty rewards programs keep it simple, giving customers free or discounted products in exchange for purchases. However, once churn starts to set in, don’t be afraid to change up your reward offerings. Think outside the box and go beyond the standard points
systems used by major brands like Starbucks and Sephora. Get creative — just make sure you’re hitting customers with these benefits before they lose interest.
Phase 3: Reinvest revenue in technology
Most small businesses don’t have the budget to implement a plethora of high-tech applications from launch, and that’s okay. However, in a post-coronavirus environment, brands need to go digital to stay relevant. This detail is vital for a couple of reasons: First, ordering from apps or websites means your customers can treat themselves while maintaining distance. Secondly, modern shoppers have come to expect a certain level of convenience, and you need to invest in technology to meet these demands.
Once it’s financially feasible to do so, invest in your company’s digital infrastructure to add innovative features that keep customers engaged in the long run. This could mean hosting online events, letting shoppers virtually try on clothes, or just developing an easy-to-use app that only requires a few clicks from open to checkout. Find digital solutions that make sense for your brand and make them a priority when budgeting.
There’s no easy way to know when it’s time to switch from acquisition to retention, but with these steps in mind, you’ll be ready when the time comes. By using tactics like customer service, loyalty rewards, and innovative technology, you’ll be able to proactively reduce churn and build a long-term fanbase.
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