Increasing your customer base is one of the biggest priorities for small businesses. Many entrepreneurs are under the impression that the only way to be successful is to expand outwards though. This leads to many companies feeling obliged to spend their marketing budgets on recruiting new customers rather than focusing within. Retention marketing, instead, could be the solution to your problems.
What Is Retention Marketing?
Retention marketing refers to re-focusing your priorities on improving the experience of your existing customers rather than chasing new ones. In a globalised, internet-reliant world, it’s now easier than ever to find alternative products or services. This doesn’t mean that there is no such thing as consumer loyalty though. Many customers would be happy to stick with their service provider, and only end up leaving because they no longer feel valued.
We commonly see this from companies who offer the best rates for new customers. While this may work initially, it’s only a temporary solution. Your existing customers will also leave for other companies offering similar discounts while your new customers, if you stick to the same business strategy, won’t stick around for long either. Social media makes it easier for people to talk to each other than ever before. If you concentrate on making your existing customers happy, you’ll find that positive word of mouth can be the most powerful marketing tool available.
How Does It Work?
One of the most common way companies employ retention marketing is by sending personalised content offers. This can be done as a part of a traditional marketing strategy with paper letters or you can switch to emails. The latter will keep the costs down, but a personalised card around certain holidays, or on the customer’s birthday if you have that information available to you, can be a more personal touch. Remember to tailor the offers to the individual in question, making use of factors such as their age, gender, and order history, to get a better idea of what products or services they might be interested in.
Another popular way to encourage repeat spending is to introduce a loyalty scheme. These have become prevalent amongst supermarkets in the form of “points.” Companies like Phorest have found that their TreatCard service increases client spending by an average of 30%, while some retailers have noted that can have an even more drastic increase in sales.
Whatever industry your business is a part of, the days of little-to-no competition are long-gone. You can’t simply get by on being the only choice in town for a particular product or service anymore. With the advent of the Internet, it’s easy to switch providers now so you need to focus on making sure your existing customers feel valued.