Did you know that it’s seven times more expensive to acquire a new customer than it is to retain an existing one?
How about that a 10% increase in customer retention yields a 30% rise in the value of your company?
Grow Your Business From Within By Improving Customer Retention
As the statistics above demonstrate, improving customer retention is one of the most powerful ways to grow your business. And the best part about that is that you’ve already done the initial legwork to bring these customers into the fold: They know who your business is and what you offer, they’re familiar with the value of your product/service and they’ve seen how that value can impact their business. In other words, they’ve cycled through the buyer’s journey once and they’re ready to go through it again, but this time they know the way forward.
Retaining Customers Requires Strengthening Relationships
Although existing customers have already gone through your buyer’s journey once before, it’s still up to your marketing team to help guide them through time and again in order to strengthen the relationship and identify new paths those customers may not have traveled before.
For example, you should capitalize on each new cycle as an opportunity to not only re-sell to existing customers but also to cross-sell and/or up-sell to them (this is a valuable frontier, as loyal customers are typically worth up to 10 times as much as their first purchase).
However, whether you’re trying to re-sell, cross-sell, up-sell or anything else, the most important thing you need to keep in mind is how you can continue to build and grow your relationships with your existing customers. That’s because the stronger your relationships with them, the more valuable the benefits you’ll receive. And when it comes to nurturing these relationships, your marketing automation platform should be your go-to source.
5 Ways to Use Marketing Automation Tools to Improve Customer Retention
Strengthening customer relationships through marketing automation can not only help you keep customers coming back to your business, but it can also turn them into advocates and advisors for your business.
With that in mind, here are the top five ways you can use marketing automation tools to strengthen your relationships with existing customers and improve retention:
- Create a seamless end-to-end customer experience: Letting customers simply drop off your radar once they make a purchase is far from a best practice. Not only does it result in missed opportunities for your business, but it also creates a poor experience for your customers. As such, you need to continue engagement even after this conversion point. Remember, when done correctly, your buyer’s journey should cycle through again and again on repeat, and those efforts need to start as soon as a purchase happens. In this sense, you need to actively engage with customers to keep your business top of mind. For instance, you might provide proactive support and offers in order to incentivize them to return. That said, you also don’t want to over-sell. As such, you should intersperse more passive engagements that keep your business top of mind (for example a regular newsletter featuring industry news). You should also consider providing early stage content to lay the groundwork for a new area in which you hope to cross-sell them down the line.
- Determine readiness with lead scoring: How active or passive should you be when engaging with existing customers? You should continue to assign customers lead scores (and keep an eye on those scores) as they go through the buyer’s journey time and again in order to appropriately tailor your outreach to where they are in the journey and to identify opportunities to keep moving them through it. Remember, especially in the case of cross-selling, even existing customers require the appropriate nurturing to help them convert.
- Continue to personalize the experience: With what content are your customers engaging? What sources are driving them to this content? Understanding how customers continue to interact with your business in light of what you already know about them is key in personalizing the ongoing experience they have. The longer your relationship with customers, the stronger it should be, and one of the most important things you can do to strengthen relationships is to deliver increasingly personalized experiences that add more value. Think of it this way: Your interactions with lifelong friends are much more desirable and valuable than your interactions with acquaintances because of the shared history you have with those friends. Your goal should be to make your customers feel the same way about your business.
- Identify and support brand advocates: Beyond the value returning customers bring in terms of reduced acquisition costs and increased purchases, they can also become advocates for your business and reduce the legwork for bringing in new customers. Marketing automation can help you identify brand advocates by tracking their activity and, once you identify these advocates, you can then further the benefits they provide by empowering them to advocate for your business even further. For example, if you find that one customer has shared a few of your blog posts on social media, encourage them to continue to do so by proactively sharing relevant posts with them.
- Ask for (and embrace) feedback: What do your customers really think about your business? What do they think you do well and what recommendations do they have for improvements you can make? Instead of making inferences, why not create a regular feedback loop where your loyal customers can share their thoughts and become true advisors for your business. After all, who better to tell you exactly what they want than your customers themselves?
As the above use cases demonstrate, by allowing you to track customer behavior and interactions and tailor how you engage with those customers accordingly, marketing automation can go a long way toward helping you improve customer retention.