Thriving businesses are dependent on reducing customer churn, building customer loyalty, and persuading customers to return again and again.
When you create loyal customers, you create a foundation for your business to grow on. While it’s always important to acquire new customers, it can cost up to 5 times more to attract them compared to retaining current customers. Additionally, returning customers spend more and are 60% to 70% likely to purchase compared to new customers whose probabilities are 5% to 20%.
With all of that, research indicates that by increasing customer retention by only 5% will increase profits anywhere from 25% to a whopping 95%. In short, it’s cheaper and far more effective to incentivize current customers than it is to acquire new ones. But in order to engage with your customers, you have to understand who they are.
Before the purchase
Different demographics react differently depending on a host of factors. For instance, men are more likely to research products online before entering a retailer when compared to women. When you take age into account, the younger a consumer is, the more likely they are also to research products online regardless of whether they’re male or female. Often they’ll research while still inside a store.
Building online infrastructure to cater to this kind of product research is a key way to encourage customers to purchase and strengthens customer loyalty. Building an online store is easy with online tools such as Shopify which will help with discoverability. Aislelabs can extend this even further by fusing your online store with customer data from your retail location, creating one of the most robust marketing platforms on the planet.
Customer behaviour in-store
Getting a customer to visit a retail store does not guarantee a purchase. Many customers leaving without buying because they couldn’t find exactly what they wanted while other customers just browse or are waiting for a product to go on sale.
This highlights the importance of stocking store merchandising that is tailored to your customers. There are a variety of ways to accomplish this, the easiest being keeping track of what sells and stocking more of that. It’s also possible to run surveys, understand customer behaviour inside of a store using a people counter, or get a better understanding of your customer’s interests and demographics through WiFi marketing and analytics. Online only customers can also provide insights you can apply to your in-store merchandise.
Showing your appreciation to loyal customers
Awarding your customers is a fantastic way to keep your churn rate down. Loyalty programs provide the ability to drive sales by having customers return to you again and again. There are also simple marketing campaigns you can run. Birthday campaigns are a great way to keep customers returning at least once a year. By offering a discount on a customer’s birthday, they’re incentivized to return and keep your brand in their mind.
After the in-store visit
It’s also important to understand that just because a customers leaves a store without making a purchase, they are not lost customers. In fact, there is still a good chance they’ll purchase something in the future as entering a store clearly indicates interest. Your job is to breath life on the embers of that interest, engaging them to maintain a relationship even outside of your store. There are a few ways to do this from email campaigns to social media awareness and even converting in-store to online purchasers. Whatever the path, it’s important to maintain contact with them.
Building customer loyalty
Loyal customers generally share a personal connection to a brand. Talk to anyone who uses Apple products and you’ll find some of the most loyal—and rabid—customers. This has less to do with the products themselves but rather the image of the company and an alignment of values. Creating a bond of trust will make customers increasingly more willing to provide you with personal information that will allow you to engage them outside of your retail location. Creating deals and coupons or a loyalty program, will provide reasonable value and benefit for customers to share their information. But this is a double edged sword as customers expect a more relevant and personal experience for them and, more importantly, that you will respect and protect the data they’ve freely given.
Being vigilant of your brand image and fostering a relationship with your customers in paramount to creating a foundation for your business. Finding new customers is important for growing your business but never let that get in the way solidifying your relationships with current customers.