Your company understands that it can cost up to five times more to find a new customer than to keep an existing one. Yes, new customers are important. However, companies that consistently grow market share are ones that understand the importance of their long-standing customer relationships. They see these relationships as vital to business growth and it’s their brand champions that make that growth a reality.
Brand champions don’t just materialize. They’re cultivated, nurtured and managed in a way that positions the company as that all-important partner. Customers gravitate to well-recognized brands because those brands anticipate their needs. They make it easy to be loyal. They make it easy to care. So, what is it that these companies do that other companies don't?
Tracking your customer retention rate, or churn rate is the critical first step to tracking customer loyalty. Define how many customers you have and account for those you’ve lost during a given period, be it a month, a quarter or a year. That period depends upon your sales cycle times, which is defined by how long it takes to close a sale, and how long it takes to secure a repeat sale.
Let’s assume you had 800 customers at the beginning of a month. You ended the same month with 725 customers. Your churn rate would the number of customers at the start of the month (800) minus those left at the end (725), divided by the number at the start (800). This would give you 9.38%. A declining value means you’re keeping more customers. Tracking this rate on a consistent basis helps you to define whether a given digital marketing strategy is working.
Perhaps the best indicator of why loyal, repeat customers are so important to your business is best defined by your customer life-time value (CLV). The simplest way to calculate CLV is to take the amount of profit you generate by customer by year and multiply it by the average number of years you keep that customer. You then deduct the costs of customer acquisition from this total. You can increase your CLV by decreasing customer acquisition costs, decreasing the costs of providing your product or service, or by increasing the number of years you keep customers. Ultimately, a more loyal customer base means a higher CLV.
Tracking your churn rates and monitoring your CLV is just the beginning. Your marketing strategies must be geared towards increasing customer loyalty and brand appreciation. Surprisingly, there are no real secrets to making this work. It simply requires your willingness to enact these strategies, while having the follow-through capabilities to monitor and improve those strategies - if need be. Here are some approaches to consider.
A common mistake is to adopt a front-end content marketing strategy while ignoring the back-end or after-sales portion of your buyer’s journey. The same content marketing strategy that secured that first order must be leveraged after the sale. In fact, an argument can easily be made that your content marketing platforms are more important once that first order is won.
Increasing customer loyalty is about building brand appreciation, and customers need to know you’ll be there long after that first order is placed. Your marketing automation software should keep you in constant touch with customers by offering new information, promoting new offers and cross-selling different solutions. Show them that you care about their business and they'll gravitate to your brand.
A simple solution could include a confirmation email with a short how-to video tutorial that educates your customers about their purchase. Combine this with other strategies like webinars and podcasts. The goal is to increase customer engagement by continually reintroducing customers back into their journey. If you properly manage every touch point along your buyer’s journey with engaging offers, then you’ll remain front and center in the eyes of your customers.
Different buyer personas need different incentives to return. Each follows a different buyer’s journey with different touch points. Your digital marketing strategies must be customized to each of your personas. This means creating different incentive and reward programs for different customer segments while also customizing your content. Yes, it’s a lot of work, but your brand means different things to different customers and personalizing your message is the surest way to reinforce that message.
You simply can’t have customer loyalty if you don’t incentivize that loyalty. A reward plan is vital to increasing brand appreciation. However, your customers must work for that reward. The biggest mistake companies make is to offer too many incentives upfront. The result is a customer base that expects too much without having to invest themselves. By all means, take advantage of the free economy and offer freebies like business whitepapers and customer case-studies as a way to introduce your company. Just be sure to save your best rewards once the customer comes on board.
Use that data and analytics to your advantage. Be proactive instead of reactive. Don't wait for your competitors to swoop down and steal your customers. Instead of waiting for your customers to call for that all-important price discount or special offer, wow them by offering it to them without notice. They come to see you as doing their work for them and they'll appreciate not having to go through the constant back-and-forth that so often accompanies a price reduction request or a request to match a competitive bid.
Competition abounds. Your competitors are enacting plans to steal your business at this very moment. They're using these digital marketing strategies themselves because they understand that defending market share isn't enough. Growth comes from repeat business and that comes from a loyal customer base.
If you need help creating a stronger, more recognized and more appreciated brand, then contact us. We can help your business build a loyal customer base. Request an assessment today.