Top Five Tips To Customer Retention

The internet has given business owners a powerful and attractive way to keep in touch with customers and improve customer retention. The same basic rules apply as they do with 'offline' customer retention tactics, but you can gain two crucial extra benefits from the online world: more regular and personalised communication with customers AND the ability to track and monitor customer behaviour.

Apply these five tips to your customer retention practise and see profitable results.

1. Know Who Your Most Profitable Customers Are

To find this out you need to know not only how much your customers spend, but also how much you spend on them. When it comes to your online marketing strategy, you can use software such as Google Analytics to track customer actions from first click through to enquiry, purchase and return visits.

Get into the habit of measuring your online marketing campaigns. Track how many sales this campaign generates. Identify the customers who respond not only to the specific offer or special of a campaign but engage in extra sales or repeat business.

It is worth creating a segment of your database for your most profitable customers. Create specials and marketing campaigns tailored to them. You can also afford to spend a little more marketing budget on them. Customer retention is all about customers feeling valued and special. Put most energy into those customers who:

• Spend well
• Are likely to spend again
• Are interested in your business
• Engage with your business beyond sales transactions (respond to surveys, emails, forums etc)

2. Behaviour Beats Demographic Every Time

The only real way to increase customer retention is to identify what actions your customers take (and don't take) and then find out why (either by analysis or direct questioning).

Don't make assumptions about your customers based on what you think your main demographic is. This doesn't mean - don't try anything new. Rather - test calculated hypotheses.

What campaigns have brought you the biggest ROI in the past? Can you run them again with a slight variation? What are your customers talking about during your inperson interactions? What sites are they coming from before visiting yours? Learn to read and keep track of ACTIONS and you will have better results with customer retention.

3. Don't Lose Your Loyal Customers To The Drift

The 'drift' happens when customers do not feel engaged and connected with your business. Online, this aspect of customer retention relates to how often you communicate with them, what you communicate about, what chances you give them to have their say (and not just listen to what you have to say) and how easy you make it for your customers to interact with each other and take you out to their broader networks.

If you lack in any of these areas, your customers are just a few clicks away from finding a new search result, a new website, a new business that will engage them more.

Active customers and happy customers and this is more true than ever online. The internet is a landscape of shared information, recommendations, updates, posts, blogs, tweets, reviews and links.

Give your customers a reason to get involved in the microcosm of your website and they will reward you by including your business in their online macrocosm. There is nothing as powerful as word of mouth.

4. Get To Know Your Customer's Cycles

Customer retention is a long, evolving process. You are always learning and of course you cannot expect to literally keep customers forever. But you can do your very best to keep them for the natural cycle of their relationship with your product or service. To do this, you need to understand the four step cycle that makes up customer retention marketing.

• ACTION - You initiate with an offer (an email or other SEM campaign)
• REACTION - You measure the immediate impact (enquiries and/or sales) of your offer
• FEEDBACK - You ask for feedback (what did your customers hope for from this offer, what more they have liked?)
• REPEAT - Is twofold: Measure the time between repeat purchases (also known as latency). And then repeat the cycle, adjusting your action from what you have learned.

5. Appreciate The Lifetime Value Of Customer Retention

This tip is a reminder of the value of customer retention. It costs a lot more to win a new customer than it does to retain an existing customer. The lifetime value of your customers rests not just in the money they spend with you, but the goodwill you create, the referrals they send to you, the word of mouth they spread about you and the affiliate and partnership opportunities they may open up to you.

Remember, many customers are business owners as well. A positive customer relationship with you may prompt them to open up other channels of marketing and even income possibilities.

Learn more about engagement and how to acquire new customers.