by Parmvir Singh
Building a core client base is one of your biggest challenges. Many start-ups enjoy a fruitful period as the ‘new kids on the block’ – but innovation only gets you so far. To ensure stable revenues and healthy growth, you need to prioritise customer retention.
Although it’s not a new concept, corporations are now recognising the importance of customer retention. Research from MarketsandMarkets predicts that by 2020 the loyalty management industry will be worth $4bn.
Customer-centric mission statements are now being backed with significant investment. It’s time to put your consumers at the heart of your business. To help you achieve this, we’ve outlined the benefits of customer loyalty and how you can build a core client base.
Why is customer loyalty important?
Before implementing a client focused strategy, it’s important to understand how your business will benefit from consumer loyalty.
Most organisations prioritise new business over servicing existing clients. Generally, this approach relies on seasonal promotions and discounts to attract new customers. It’s a short-term strategy that sporadically grows revenues but significantly reduces the likelihood of building long-lasting trade.
For consistent revenue growth you need to realign your objectives and focus on customer relationships. It’s a mutually beneficial strategy that should focus on generating goodwill with clients. In return, your company will enjoy more repeat purchases and benefit from greater opportunities to upsell products and services. The effects can be seen almost immediately. Research from global consulting firm Bain & Company stated a 5% increase in client retention rate can increase profit by up to 95%.
Customer loyalty will not only boost your revenues, it’ll also help to cut costs. Analysis from Forrester identified that retaining customers is five times cheaper than acquiring new ones. Shifting objectives from new business to client retention delivers an instant return-on-investment. So, if your business goals are to save money or grow revenues, it’s time to put your customers first!
How to build a core client base
Whether your trade is business-to-business (B2B) or business-to-consumer (B2C), the steps outlined in this section provide the foundations for a successful customer loyalty strategy.
1 – Get to know your customers
To develop long-lasting relationships you need to understand who your customers are. For B2B organisations, it’s essential you keep up-to-date with your client’s business goals and industry trends. You don’t have to be an expert in their field, but by knowing what motivates and concerns them you can tailor interaction, support and marketing messages.
B2C companies are often guilty of relying on segmentation to understand their customers. Segmentation provides demographic information such as gender, age, location and occupation – but it fails to account for typical buying behaviour. Effective keyword research can tell you exactly why your customers are purchasing from you and is therefore the foundation for successful marketing campaigns. For example, if you’re a beauty retailer and discover consumers search for your brand name + cruelty free or vegan – it’s likely that your customers value ethical considerations over other motivating factors such as price, celebrity endorsements and fast delivery.
Top tip – if you don’t have the budget for specialist keyword software, try answer the public – it’s a free search engine analysis tool.
2 – Go the extra mile for your core customers
Clients are demanding. Some more so than others, but in general customers expect to get value from every penny that they’ve spent on your products or services. Often, this means you’re expected to answer ‘emergency’ queries out-of-office hours or run extra training workshops.
However, for start-ups the most common and complex conundrum is when to tailor your offerings to meet the needs of a consumer. To make the right decision you need to consider:
- Is your relationship with this client worth comprising your core offerings?
- Would the new product or service be beneficial to your other customers?
- Do you have the expertise to do as the client has asked?
If the answer to the questions above is yes – it’s the right time to expand your products or services.
There are multiple benefits to offering bespoke solutions. Firstly, consumers will remember that you went the extra mile to meet their needs. This goodwill can be converted into upselling opportunities – after all, a happy customer is more likely to buy your new products and services. Secondly, the new offering may open an innovative revenue stream. It’s reasonable to assume your core client base will also benefit from the new offering.
3 – Show the world you value customer relationships
In the era of digital transformation, customers are quick to pull out their smartphone and air their grievances on social media. If there’s anything wrong with your products or services, you’re likely to be bombarded with tweets from angry consumers seeking answers.
Naturally, the prospect of an irritated Twitter mob is daunting. But instead of ignoring negative feedback, use social media to show off your excellent customer service skills. It’s important to make your customers feel valued – even if they’re complaining about your organisation. Efficiently resolving issues and responding to feedback on social media ensures your core client base is receiving the appropriate level of support.
It’s worth noting that social media is like word-of-mouth marketing on steroids. A single post, tweet or comment has the potential to be viewed, liked and shared by thousands. Prompt and dignified replies to negative feedback can boost your brand’s image and demonstrate to the digital world that you value customer relationships.
Shape your business around loyal customers
When creating your customer retention strategy it’s important to remember the marketplace is crowded with competitors. It’s natural for your clients to think the grass is always greener on the other side. Despite the difficulty, it’s your job to convince consumers your business provides the best products or services for their requirements.
This is where your customer retention strategy comes in. By investing money, time and resources you can transform the traditional client – vendor relationship into a trusted partnership. Clients will feel valued and satisfied, and in return your business will enjoy stable revenues through repeat purchases and upselling.
Parmvir Singh is a freelance copywriter, currently travelling in South East Asia.Check out his portfolio and blog here: www.parmvirsingh.com
Image source - Pexels