Business owners of small-mid sized B2C companies—or entrepreneurs getting their enterprise off the ground—know that there are certain things that must be done in order to guarantee long-term success. The things that have brought success in the past must continue—and improve over time. This typically revolves around acquiring more customers and retaining the ones you currently have.
However, we sometimes—in the hustle and bustle of running our businesses—loose sight and take our eye off the ball of managing our customer retention programs. We tend to rely heavily on our products superiority, thinking that if we deliver a great product, customers will follow. When this type of thinking occurs, it’s easy to get off track. And before you know it—customers begin to bail.
According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%. And if those numbers don’t impress you, Gartner Group statistics tell us that 80% of your company’s future revenue will come from just 20% of your existing customers.
Still not sold on customer retention?
One final statistic provided by Lee Resource Inc. should give you plenty to think about: Attracting new customers will cost your company 5 times more than keeping an existing customer. (Source: Forbes)
In order to retain your customers and build brand loyalty, here are 7 things to keep in mind.
1. Do not over promise
It’s really easy in your marketing communications to bolster your value propositions that make your audience think that what you’re offering is the next best thing to sliced bread. Take extra care not to over promise your products key differentiators in an attempt to make your packaging and marketing more powerful. Focus on creating a brand image and supplement that with a message that doesn’t over promise to your customers.
If you can’t deliver on it, don’t promise it. And remember the old adage: “Under promise, over deliver.”
2. Cutting corners can be disastrous
In 2011, Blackberry’s (RIM) entire network of 70 million customers went down. This happened because Blackberry did not adequately prepare for their customers increased demand for video streaming.
“Industry insiders and former RIM staff say the company has been storing up problems for years through its approach to its system – and the outage was only to be expected.” (Source: The Gaurdian)
At some point, someone at RIM decided not to invest in new system upgrades most likely in attempt to save some money.
This cost Blackberry its brand and plenty of marketshare (10% in 2011 now down to only 1% in 2015) (Source: Business Insider)
Blackberry’s demise could have been avoided by not cutting corners and keeping a better eye on what their customers wanted.
3. Keep it simple
We all love Apple because their products are simple. In our fast-paced, I have no-time, gotta-run world—you must simplify your products and services in order for them to be relevant. Anything that requires an extensive learning curve, or a lot of time to figure your product out—will be given up on and lost in the noise.
Keep your products simple. By removing as many extra steps as possible—you will provide a better product experience to your customer. It will also help you simplify your communications.
4. Invest in your brand
I bought a GPS/heart rate monitor a few years ago for $500 plus tax—a big investment for my triathlon training requirements. Through the course of my use, the face got scratched making it unreadable, the watchband broke several times and I had to replace the heart rate monitor strap 4 times. I decided to keep reinvesting in it, because to replace it would have cost me even more money. I logged onto to the products support site and found people having the same problems, but I still hung on to it.
When I initially purchased the watch—I thought the brand was superior to that of its competitors and that it would give me an edge in my training. I knew I was buying the Mercedes of training watches—but in the end, I was disappointed and worse of all—angry. If the watch came with guaranteed product support and replacement, it may have sat a little better with me, even though I felt cheated, I didn’t desert the brand, and gave it three more chances.
The lesson here is, by investing in brand development that positions your brand as superior—you can potentially retain your customers, even if they become unhappy. If you asked a Mercedes owner why they keep driving a car that needs to go to the shop for repairs every other month, they’d tell you: “because Mercedes is the best.”
5. Provide over-the-top customer service
If you’ve ever been overcharged for something you know that it needs to be resolved right away. If you have to make your customers search for a customer service number and then give them a foreign speaking service rep who could care less about your problem, this will definitely cause customers to become angry. Over the top customer service must be provided at all times.
A great example of a company that provides over-the-top customer support is an enterprise hosting company called Rackspace. Their tagline: “Fanatical Support” says it all. They give their customers the assurance they need that when something goes wrong—you can get someone on the line right away and get an answer on the spot. Because of companies like Rackspace, the customer service paradigm has shifted. Everyone expects great customer service.
6. Utilize social media to stay in contact
If your customers subscribe to your Facebook feed, they want to hear from you. By implementing an inbound marketing strategy you’ll have plenty of interesting content to share that keeps your customers engaged, informed and delighted. See the free resource below on more information about attracting customers with Facebook.
If you’re not utilizing social media to build a following for your products, you’re missing a huge opportunity to drive traffic and increase revenue.
7. Let them know you’re thinking about them
It also doesn’t hurt to budget some perks for your customers from time to time. Not all marketing spend has to be on advertisements, direct mail and tradeshows. A great example happened to me a few months ago. I received a letter from Southwest Airlines for 4 free drinks next time we fly—that don’t expire till the end of this year. Next time I fly—guess who I’m booking with? Southwest.
It’s the little things that can make your customers very happy.
In conclusion, to build brand loyalty and retain your customers, don’t over promise or cut corners. Keep it simple, build a brand that holds on to them, provide over-the-top customer service, utilize social media to stay in contact and let them know you’re thinking about them once in a while.