How to Increase Profits by Focusing on Customer Retention Strategies

How to Increase Profits by Focusing on Customer Retention Strategies

I’ll show you the best ways to increase profits with customer retention. But if you’re releasing new blog posts each day, or even a few times per week, you give your customers a reason to keep checking your website. This strategy gives your existing customers an incentive to spend more money since they know they’ll be rewarded. So yes, they’re getting a new customer. You can implement this same type of referral structure to your business. As you can see from these numbers, consumers are more likely to buy from brands that suggest products based on their purchases and browsing behavior. These product suggestions are a great way to make more money. You can also use your app to implement other strategies I’ve discussed, such as a customer referral program, product suggestions, and a platform for customer surveys. As far as retention goes, mobile apps create a 50% greater chance that an ecommerce customer will return to your online store within 30 days. What customer retention strategies does your brand use to drive more sales?

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There’s a common misconception that businesses need to acquire new customers if they want to make more money.

Getting new customers is obviously beneficial and can help your business grow. But that’s not the only way to boost your profits.

Focusing on customer retention is a much more viable and cost-effective marketing strategy.

In fact, it will cost you six to seven times more money to acquire a new customer than it will to retain an existing one.

Not only is retention cheaper than acquisition, but it also has a very high ROI. Research shows that you can increase your profits anywhere from 25-95% just by increasing your retention rates by 5%.

Imagine how much more money you’ll make if you increase those retention rates by 10% or even 20%.

Don’t get me wrong: I’m not saying you should completely ignore your acquisition efforts. But if you are looking for ways to market your company on a budget, it’s in your best interest to focus on your existing customers.

Take a look at these loyalty statistics for ecommerce brands:

loyal shopper

As you can see, customers who have made multiple purchases with a brand have a higher add-to-cart rate and conversion rate than new shoppers.

These customers also generate more than six times the revenue per session than new shoppers.

So it only makes sense that you should be prioritizing these customers.

I’m sure you’ve heard this age-old proverb: “A bird in the hand is worth two in the bush.”

You’ve already got these customers in your hand. Don’t risk losing them by putting all your effort into customer acquisition.

I’ll show you the best ways to increase profits with customer retention.

Leverage your blog to establish loyal readers

Most people may not associate blogging with customer retention. But blogging overall is one of my favorite content marketing strategies.

In addition to helping you increase website traffic and generate new leads, blogging can also help you engage with your loyal customers. This is especially true for ecommerce brands.

Ask yourself this question.

How often does the same customer visit your website?

I’m guessing you’re not getting repeat purchases from the same customer on a daily basis.

But if you’re releasing new blog posts each day, or even a few times per week, you give your customers a reason to keep checking your website.

Hook these readers with your content. If they use your products and read your blog, your brand will be on their minds more often.

Plus, the more they visit your site, the greater chance you have of getting them to buy something else. This strategy is extremely cost-effective.

The only major cost is the time it takes to write each post. In 2017, the average time it took people to write a blog post was just over three hours.

blog post
It’s well worth your time and effort if you’re able to leverage this strategy to create loyal readers and retain your existing customers.

Use surveys and interviews to get feedback

In order for you to properly focus on retention, it’s important for you to understand what causes customers to leave a business.

Research shows 68% of consumers leave a business because they don’t feel the brand is valuing them.

Only 14% will leave because they’re unhappy with your product or service. And 9% of customers leave because of your prices.

What does this tell you?

Customers care significantly more about how they’re treated than the products and prices of what they’re buying.

One of the best ways to show your customers how much you care about their opinions is by asking them directly. You can use surveys and interviews to generate more revenue for your business.

This strategy accomplishes a few things.

First, it shows customers you care about them, which we already established. But the results of these surveys and interviews can also help you make your business better.

If you’re doing something wrong or your brand could use some improvement, you’ll find out from these campaigns.

Once you’re able to identify what needs to be fixed, customers will be happy to see these changes get applied.

This type of service enhances the customer experience, which I’ll elaborate on in greater detail shortly.

Implement a customer loyalty program

The name says it all. The purpose of establishing a customer loyalty program is to create loyal customers.

Research shows that consumers are much more likely to shop at stores with loyalty programs.

increase chances of shopping

Give your customers what they want.

There are many different ways to approach your loyalty program. For example, you can reward your customers based on how often they shop.

These types of programs have been around forever, and I’m sure you’ve participated in them during your life.

A local pizza shop in town may give out punch cards to their customers. After ten visits, they get a free pizza.

But with the advancements in technology, this type of “punch card system” has evolved. Businesses with mobile apps have been able to eliminate the need for customers to carry a physical card. We’ll discuss mobile apps in greater depth as we continue.

If your business operates online, you can track your customers’ purchases through their profiles.

Another type of loyalty program rewards your best customers. For example, let’s say two customers each made a purchase from your store ten times in the last six months.

Should they both be rewarded equally?

If one customer spent $100 and…