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Customer Retention Issues, Beliefs, and Solution
A customer base is the backbone of any business. While new customers may come and go, return customers are more valuable to your company by a long shot. It’s important to ensure that you are not losing customers in a revolving-door effect.
The loss of a customer can have a variety of negative effects. Aside from the potential for bad reviews and the loss of future profit, heavy customer churn can bring a business to its knees. Some churn is normal, but retention is one of the most valuable components of owning a business.
While every business is different, any company with customers has to deal with the ugly reality of a churning customer base. This article will focus on the problem of customer retention. We will also discuss some common beliefs behind it and the solutions for solving them.
Customer Retention is a Problem
The probability of selling to a return customer is between 4-14x higher than the probability of selling to a new customer. While a new customer only has a 5-20% chance of a successful sale, a return customer offers a 60-70% probability of conversion. That’s just for the products that you have on the shelves today.
Existing customers are also 50% more likely to try a new product that your business offers. All while the trend of brand loyalty is increasing. Millennials are 16% more likely to remain with a brand than consumers 35 and up.
Customer retention is a powerful strategy that can help your business save on acquisition costs, boost conversions, and create loyal customers.
So, what’s the problem?
Only 18% of businesses focus on customer retention. Not only that, many relationships don’t even have tools to accurately measure this.
Common Beliefs of Solving Customer Retention Issue
While well-meaning, there are some commonly held beliefs on customer retention that are not helpful. Below, we address some of the common misconceptions around customer churn.
Good Products Alone Will Keep Customers Coming Back
While a good product certainly helps with lowering churn, it is not enough on its own. Good products are enough to get customers through the door, but it may not be enough to keep them coming back. The fact of the matter is, unless your product is one-of-a-kind, there is always competition.
Marketing Spends Only on Acquiring New Customers
While marketing should always be a part of your business strategy, if the leak is not plugged, it is a waste of all the money spent. Increasing the spending on marketing helps with bringing new bodies into the door. Before this, it is better to figure out how to keep the ones you already have.
Taking some of that money and putting it towards comprehensive customer engagement might be a better bet.
Market to as Many People as Possible
While more is often better, quality over quantity is the motto for marketing. Figuring out exactly who your customers are and marketing directly to them is far more effective. Instead of investing in broad email or marketing platforms, it is often better to consider more robust options.
The Solution
Correct marketing can help address the issue of customer retention, but it’s not all about targeting a giant pool of potential customers. Marketing automation is the solution to this issue. With marketing automation tools, businesses can harness the power of the information they already have.
With automation tools, businesses can send personalized, informative content and promotions to their customers. Additionally, these tools allow businesses to capture data on their sales and customers. This is the key to understanding their behaviors.
Once you can understand the customer base, you can begin directing effective marketing efforts directly to them. Most businesses operate without this information. Thus, providing an opportunity for your business to stand out amongst the crowd.
Through this, automation helps with the personalization of your marketing efforts. With personalization, you can ensure that you aren’t sending the same, drab email to every customer.
Roll all that in with the fact that you will be bringing on a team of experts to help with the issue and this is a slam dunk. This has huge advantages over hiring an in-house marketing person. For less money, you can hire the expertise of an entire business.
There are many solutions out there and it can be hard to choose which one is best for you and your business.
Engage 2 Engage is Here to Help
Engage 2 Engage is here to help! At Engage 2 Engage, we offer high-quality web tech, marketing, content, and design services. The owner of the company, Valeh Nazemoff, brings a diverse background of knowledge ranging from business to tech and neuropsychology.
Engage 2 Engage is aware of the struggles small business owners face every single day. We know them intimately and have a lot of experience in fixing them via marketing, tech, and web automation. By hiring Engage 2 Engage, you will be hiring a team of knowledgeable professionals. Let us assist in taking your business to the next level!
Visit our programs today to help you improve and automate your business for customer retention!
