Customer Retention, Re-Engagement can Energize Your Business
It’s obvious that everyone is fed up with life in the coronavirus world. People are tired of the restrictions. They’re tired of social distancing and self-quarantine. They’re tired of reading about it and seeing it on the news. However, as the world begins to reopen – who knows for how long – studies have shown many people are slow to re-enter the marketplace or social scenes. That is why putting a little effort into customer retention can energize your business.
It’s a rule of thumb in retail that it costs anywhere from five to seven times more to acquire a new customer than it does to retain an existing one. That rule is even more important now as the retail world works to bounce back from the shutdown. It’s also why savvy retailers should be using every means possible to reconnect with their loyal customers as they begin to re-open their stores.
REASONS FOR RETENTION
There are plenty of reasons for reaching out to retain good customers.
- They’re familiar with you. Repeat customers know what products you have, probably know where to find it, and they’re comfortable with your store and your employees.
- It’s proven that people are more likely to shop from familiar brands rather than trying something new, especially coming out of a period when all stores were closed.
- You already have their information. That makes it easier for you to reach them with messaging and marketing, even if your store has been shuttered.
While the customer retention rule of thumb is often citied, according to research by Amy Gallo for Harvard Business Review, studies show that acquiring a new customer can cost up to 25 times more than keeping a current one. Additionally, the study shows that increasing customer retention by just 5% can increase profits anywhere from 25% to 95%.
RE-ENGAGE LONG-LOST CUSTOMERS
Unless you own what is considered an “essential” business that remained open during the shutdown, chances are you haven’t seen your customers for the past couple of months. Now, as America tries to restart its economy – whether it’s premature or not – you need to reconnect with those folks and there are plenty of ways to do it.
Reward them. Customer rewards programs not only benefit loyal shoppers, they are also a boon to businesses because they provide valuable customer information. The information gathered through these programs is especially valuable during the shutdown. It allows savvy business owners to stay in touch with customers when their doors are shut for whatever reason. When reopening, use that contact information to kick customers a coupon or other incentive to return to your store.
Fancy rewards programs aren’t just for big-box stores. Programs such as Paladin Data Corporation’s Rich Rewards or providers such as Repeat Rewards offer independent businesses incentives that keep customers coming back and they can be operated through your point of sale process.
Be socially responsible. It’s hard to imagine in this online world a retail store or any kind of business today that doesn’t have some kind of digital presence – a website or social media site. A website blog or an active social media site is a great way to stay in touch with customers when the store is closed and invite customers back when reopening. Personalizing your business through a blog or social media keeps you at the top of your customers’ minds.
“People like people. Shocking, right?” says marketing guru Neil Patel. “That’s why even the most boring and dry companies should at least give their blog a personal touch. The reason my face is everywhere on (my) site isn’t because I love myself, but because it helps me connect with readers.”
Celebrate them. Businesses with comprehensive incentive programs often have customer information such as birthdays and anniversaries. Use that information to send out birthday rewards. For businesses without incentive programs, a little digital research can turn up birthdates and other ways to celebrate.
Seek feedback. Instead of trying to coax customers into the store to sell them something, ask them what changes, improvements, or products they would like to see in the future. It’s a way of personalizing your store and service. A customer survey could be part of the effort. Some businesses use Key Performance Indicators – short customer surveys – to help them improve their store and services. This can be part of an email campaign or social media post.
“Consumers expect more from merchants today. Due in part to the evolution of retail, which now offers more personalized choices from e-commerce companies, shoppers want similar features such as personalized offers and rewards programs from their neighborhood stores,” says Dan Nesmith, president of Paladin Data Corporation, a leading provider of retail technology to independent businesses.
In this age of social distancing, protective masks and self-quarantines, getting face-to-face with customers might seem impossible. But when your doors reopen, it’s important to get some facetime with your shoppers.
“It’s simple. There’s no substituting face-to-face conversations to build a connection with customers,” Patel writes in his blog.
A study published in the Journal of Experimental Social Psychology shows that in-person, face-to-face requests are 34 times more successful than emailed requests. That shows the importance of face-to-face communications.
While the coronavirus restrictions make it difficult and socially awkward to interact today, working within the social norms of masks and personal distance can make it possible and highly valuable.
Customer retention done correctly is part of a business’s routine customer service, not just in desperate times like the coronavirus outbreak and response. If it’s incorporated into a store’s retail platform, it can become automatic and benefit both the customers and the business forever.