The topic around increasing customer loyalty has been around for years. Yet, I have analyzed many entrepreneurs, startups, and creatives, wanting to invest more in acquiring new customers, over nurturing the ones they already have.
Increasing customer loyalty has proven to reduce costs and result in greater ROI. On average, it costs six times more to acquire a new customer than retaining an existing one. Just ask yourself: How would having loyal, repeat customers impact my business?
According to a McKinsey study, repeat e-commerce customers spend more than double what new customers spend. Ensuring customers stick with you throughout your business life cycle will not only increase profits, but yield higher, positive word of mouth (hello, free marketing!).
The Nielsen’s Global Trust in Advertising Report finds that 83% of it’s respondents said that they trust the recommendations from friends or family more than any form of advertising.
So, how are you actively nurturing your existing clientele, in a world where consumers are more inclined to shop around?
Here are 3 effective ways to engage your existing clientele, right now.
1. Make it personal: Show your customers that you care through continuous, personalized communication.
2. Happiness is key: Ensure that your clients are satisfied with your services by soliciting feedback through online surveys.
3. Validate: Think about how you can prove your customers are important to you (i.e. rewards, shout outs, mentions).
Although I do not advise that you forgo actively trying to acquire new customers, I do recommend doubling down on increasing your customer loyalty.
After all, customer disloyalty has reported to stunt business growth by 25%-50%.
A great model to analyze the effects of loyal versus disloyal customers is The Net Promoter Score (NPS) index. The NPS is used to gauge customers overall satisfaction with a business, product or service, and their loyalty to the brand.
The NPS is determined by subtracting the percent of customers who are “detractors” from the percentage who are “promoters.”
I will not go in depth about NPS score in this post. However, the most important thing you should know about this index, is that having unhappy or disloyal customers could do more damage to your business than you think. The key is to invest more into your promoters and loyal customers. By doing so, you’ll inevitably attract more clients for your business.
What are some innovative ways you are keeping your customers satisfied during this time?
Original Post By: Allyssa Munro