Your success of selling to an existing customer is 60-70%, while you have a 5-20% chance of selling to new customers.
Which means one thing:
You need a way to retain as many customers as possible.
You’ll always have to find new customers, but keeping the customers you already have needs to be your top priority for long-term sustainability.
We’ll show 5, data-backed customer retention strategies in today’s post.
Let’s dive in.
Customer Retention Strategies That Reduce Churn and Build Loyalty
1. Have a Mission - an Overarching “Why”
Customers stick with companies that they believe in and identify with.
According to research published in Harvard Business Review, 64% of consumers who said they have a strong relationship with a brand cited shared values as the reason why.
Real connections create loyal customers.
If you want to create a strong bond between you and the people buying your products, then stand for something. Have a mission.
Or as Simon Sinek puts it:
"People don’t buy what you do, they buy why you do it.”
Take TOMS shoes, for example.
They only sell shoes. There are over 75 shoe brands in the USA.
How did TOMS create a loyal following of diehard customers?
By putting their inspiring mission at the forefront of their marketing, branding, sales, and business model.
On their website, they state:
“With every product you purchase, TOMS will help a person in need. One for One.”
Their entire mission can even be boiled down to those last 3 words, one for one.
Every time you purchase one of their products, they give away that same product or one of equal value to someone in need.
Buy shoes? A child born in poverty gets their own pair in their own size.
Buy eyewear? They’ll provide someone with surgery, glasses, or some other form of help for their eyes.
Buy coffee? TOMS provides clean water to people in the same region they source their coffee from.
And it’s this mission that drives people crazy for TOMS, even when their actual product, shoes, aren’t much different or necessarily “better” than anyone else’s.
2. Have a Personality
This goes along with the last point.
Customers crave authenticity and a personal connection with businesses. They’re not content doing business with a faceless, lifeless, cold corporation.
They want to understand your point of view and relate to your personality.
But it’s hard to come across as human.
One way to do it is by inventing a mascot to represent your company. Planters did this with Mr. Peanut.
This avatar allows Mr. Peanut to have the personality Planters can’t have, or refuses to have.
So if you follow Mr. Peanut on Twitter, for example, you’ll see jokes like the following:
A humorous personality is the hardest one to pull off, but probably the most effective. And people are going out to buy and eat many more Planters peanuts purely because of the good feelings provided by Mr. Peanut’s tweets.
3. Measure Customer Satisfaction Scores
Customer Satisfaction Scores (CSAT) asks this one simple question:
“How satisfied were you with your experience today?”
It’s usually best to ask this after some kind of transaction.
If a customer buys a product, contacts customer service, resolves a complaint, or has any other significant interaction with your company, you can send out the CSAT.
The real big benefit of CSAT is gaining real-time feedback on your performance and your customers’ experiences. If you start receiving negative feedback, you can respond and change accordingly.
And if you’re not sure what your CSAT should be at, you can compare it to the American Customer Satisfaction Index in your industry.
The other two methods for measuring customer satisfaction are:
- NPS (customer loyalty): “How likely are you to recommend our product or service to family, friends, or colleagues?”
- CES (customer effort): “How easy was it to deal with our company today?”
Ultimately, these metrics help you put your customers first and consistently deliver high quality products and customer service.
4. Pick a Friendly Fight with Your Biggest Competitor
All humans love drama.
That’s why we devour shows like Game of Thrones and hang on every word and action of our favorite reality stars in shows like The Bachelor.
You can create fun, friendly drama in your industry by picking a fight with your competitor.
A famous twitter exchange between Burger King and Wendy’s illustrates this perfectly.
Wendy’s tweeted a promotion for their 4 for $4 meal option.
Burger King tweeted a 5 for $4 meal option, saying “because 5 is better than 4.”
When a customer on Twitter asked Wendy’s “what are you firing back?” Wendy’s replied:
It’s hilarious and no doubt cemented Wendy’s as the superior fast food in the minds of existing customers, and may have even converted a few Burger King fans to come over to the red-haired, pig-tailed dark side.
Another, older example of this is the Mac vs PC campaign put out by Apple. They ran scores of ads that beat up on PC’s problems while painting PC as a dorky old nerd and Mac as cool, young, and funny.
Don’t be afraid to be bold and pick a fight. It helps galvanize your customers and deepen their loyalty.
5. Use Social Proof
There’s really no better tool of persuasion than social proof.
A prospect is much more likely to buy from you when they see that other people use your products and love your products, that your products have solved their problems, that they’ve achieved their dreams and goals using what you sell.
60% of survey respondents indicate that they trust consumer opinions posted online, according to research conducted by Nielsen.
But not all social proof is created equal.
ConversionXL conducted research into the best types of social proof, here’s what they found:
Out of the 8 treatments (plus control), viewers were significantly more likely to remember high profile client logos (not low profile), testimonials with photos (not testimonials without photos) and press mentions.
If you use the right social proof, you’ll convert new customers and retain existing ones much more than you would without it.
One Final Customer Retention Strategy - Live Video
The last customer retention strategy is simple, but difficult to do well:
Outstanding customer service.
There may be no better way to make people feel great about your company than delivering a great customer service experience.
There are 2 keys to delivering excellent customer service:
- Good people
- Good software
You probably already have the right people.
What you’re missing is software that allows them to go above and beyond in their jobs, delivering the best possible customer service experience.
That’s where CloudApp comes in.
We help customer support teams:
- Easily create support materials and tutorials
- Optimize customer support workflows
- Provide customers with detailed answers and close Zendesk tickets faster
- Improve your team's CSAT scores
- Track bugs and document problems
- Improve customer support initiatives - download your FREE 6 slide template here
Learn more about CloudApp for Customer Support here.