Do you spend time and money on customer acquisition? How about customer retention?
Growing a business is best accomplished by growing the number of customers, but customer acquisition is not the end-all of it. In fact, customer acquisition cost is increasing by the day and it is this reason and a few more that retaining a customer has become all the more critical.
As a business owner you need to know that as much as it is important to focus on customer acquisition, it is equally important to focus on customer loyalty. Simply because it’s much easier to sell to existing customers than attracting new ones!
- Increasing customer retention rates by just 5% increase profits by 25% to 95%. (Bain & Co.)
- Attracting a new customer costs 5-25x as much as keeping an existing one. (HBR)
- Globally, the average value of a lost customer is $243. (New Media & Marketing)
- The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20%. (Marketing Metrics)
Thanks to digital channels, retaining customers have become simpler, even those who signed up with you and went into hibernation or purchased once or twice and then completely forgot about it.
But are you on the right track?
Many businesses abandon customers when they stop responding to marketing efforts. Why abandon a customer who has already given you some business?
Even if a customer has not responded for a while, spending on a dormant customer is less expensive than acquiring a new one.
When focusing on customer retention, most businesses do it wrong. Instead of instantly driving sales by going from 0 to 100 from your dormant customers, your focus should be on generating interest and creating engagement.
And this is where an SMS plays a powerful role. Want to know how, read on…
- Identify the candidates – which past customers can be the perfect candidates for re-engaging
I’ll contradict my earlier statement here – just because some customer did business with you in the past doesn’t mean they’re worth pursuing. Don’t get me wrong! I’m trying to help you identify your target audience.
Look for signs
- Customers who have opened your emails/SMS over that past couple of months
- Customers who have made a couple of purchases
2. Make it a two-way street – hold the conversation
Customers don’t just want to know what’s going on with your brand; they also want to tell what they feel. Customers are only human, and humans enjoy two-way conversation.
Make sure most of your SMS marketing is a one-on-one dialogue unique and relevant to the recipient. Use shortcodes and longcodes to receive feedback from customers.
- Get personal – create tailored content for each segment
Sometimes the lack of customer activity can be your fault – if you aren’t sending the relevant messages tailored to your audience then the customer has nothing to respond to. Make sure to follow up a customer with targeted messages that add value to their experiences.
- Make it easier – don’t make it hard for your customer to shop with you
Personalize the content on your email, SMS, website, social media platforms to make it easier for people to find what they are looking. Use analytics to show them what they might like based on what they’ve brought or browsed in the past. Use short URL to direct them to the purchase page of your site. It’ll save their time and reduce the risk of them looking at your competitors.
- Start a drip campaign – give customers a reason to return
To re-engage past customers you need to stay on their minds and what better way to do that than running a simple SMS drip campaign. A drip campaign is a series of text messages that you send over a period of time with only one goal – gaining the trust of your customer and slowly and steadily moving the recipient to action.
While every business is different, starting with one or two SMS per week is a good start and then increase the number as per the analytics and identity trends.
- Prompt a purchase – convert a lapsed customer into an active buyer
Customers tend to get distracted, they forget and eventually lapse. Don’t wait for them to make a purchase, prompt them to do it. Incentivize and convert a customer by reaching out to them with timely reminders.
- Give them a reason to return – offer them value
You have to give your customer a reason to come back. This can be done in a number of ways but you can start by offering a deal. A time-sensitive deal with an expiry date can work well.
- Sometimes people just don’t want to buy — they want to be entertained, informed, or helped
Sometimes you need to overlook the short-term sale and focus on building a longterm customer relationship. Share some suggestions, advice, blogs, articles – content relevant to the customer to build a rapport with them. Include short URL in your SMS to keep the customer engaged with your content.
- Know when to let customers go – ask them if they want to stop receiving your text
If despite your best efforts your customer just doesn’t return ask them if they want to stop receiving your updates. This tactic, you never know, a last respectful and humorous farewell might prompt a response.
Time to wake up your customers from their hibernation!
Customers don’t owe you their loyalty. You have to earn it – continually. An effective customer retention program gives you the ability to identify, track, and custom promote to those who are most likely to become your long-term sources of revenue.
Re-engaging dormant clients is absolutely worth the investment and with a few strategies in place (mentioned above) and a powerful communication medium (SMS has a 98% open-rate), it is possible to woo them back to your business.
Re-energize stalled customer relations with personalized marketing!
Companies that actively communicate and keep their customers engaged to better meet their expectations are on their way to achieving the prime objective of any customer retention program; greater customer loyalty.