How To Scale Your Brand By Increasing Your Customer Retention Rate
As business owners, entrepreneurs, and marketers, we are always looking for new opportunities, leads, and marketing tactics that will bring us closer to our financial goals. While we shouldn’t stop seeking those opportunities, it’s important to remember what and who got us to where we are today.
Many will think of and thank their supportive family members and friends, some may remember that first bank loan they used for start-up business expenses, but what else are we missing? Or rather, who else?
Some of you have guessed it already, but for those who haven’t – when was the last time you remembered, acknowledged, and appreciated those first customers or clients? Have they been coming back to your business or brand? If so, you must be doing something right (keep it up)…
But if your customers aren’t coming back, you are missing out massively.
The phenomenon of people coming back to your business and purchasing your product or service over and over again is called customer retention. It refers to the practices brands and businesses use to keep existing customers loyal over time.
Let’s explore this topic and how you can boost your customer retention rate to scale your business faster!
The Importance Of Customer Retention
When brands only focus on increasing their client base, they might potentially lose revenue from existing customers unless their marketing strategies involve both retaining and expanding customers, which are equally important.
What does your business focus on?
Here are some benefits of increasing your customer retention rate:
- Increased Revenue: Repeat customers make repeat purchases, and should your brand come up with new products and services, loyal customers are more likely to try them out and spend more, considering they are happy with the quality of their previous purchases.
Fun fact: did you know that increasing your customer retention rate by just 5% can increase your business revenue by anywhere between 25 and 95%? While the range is quite wide, wouldn’t an increase of even 25% make a difference for your business or life? - Lower Costs: While both customer retention and acquisition are equally important for your business, acquiring new customers can be quite pricey while focusing on retaining the existing ones can help you save some dollars.
- Increased Client Base: It may sound contradictory, but focusing on customer retention can actually increase the number of leads and customers for your business. Those happy with the quality of your product or service are very likely to mention it to their friends or family – that’s how referrals are born.
By the way, if you are curious about how to attract referrals and improve your business even more, we have just the article for you!
Pro Tips For Retaining More Customers:
- Consistent Quality: Your business is likely to see an increase in the number of returning customers if the quality of your product or service remains consistently good (and continues to improve over time).
A lot of brands make a wonderful first impression when coming out into the market, however, soon after the opening, their business slows down. While many factors could be the cause for that, lower product/service quality is definitely one of the major things to consider.
There are hundreds of businesses attempting to enter the same industry as you are, and one of the biggest factors that will get you ahead of the game is to never loosen the grip on the quality of things you provide. - Personalization: Focusing on improving customer experiences and tailoring your product or service to fit people individually based on their preferences, values, and interests shows that you and your brand care about the people, not just income. This has been one of the key success factors for companies in 2024 overall.
Now, personalization can be difficult to implement; however, there is a way to keep the experience with your brand hyper-personalized for your target audience – attract and focus on serving a very specific segment of people within your niche and tailor all your products or services to their needs and preferences. - Subscriptions: The subscription business model benefits those providing remote or online products or services, such as SaaS, newsletters, or courses. It offers the customer an automated and cost-effective way to receive the needed information or service, and it can increase your customer retention rate (because of the convenience aspect).
- Referral Program: As mentioned earlier, people are likely to mention, recommend, or refer their friends or family to an establishment if they are happy with the product or service.
To increase your chances of that happening, you can encourage and incentivize people to do so by implementing referral programs where both the referee and the referred get some sort of bonus: it can be a free gift, a discount coupon, free shipping, etc.
You can also offer a win-win affiliate program, allowing customers to earn commissions by referring people to your business. There’s no better way to build a bond quickly with customers than to help them make more money. - Loyalty Program: The incentives in a loyalty program can be similar to those in a referral program, but the purpose of a loyalty program is to acknowledge and show appreciation to existing customers for returning to your establishment by rewarding them with different perks and bonuses, such as points and coupons that can be used for their next purchase.
- Consistent Selling: This one is a bit counterintuitive, but one of the best ways to retain your customers is to keep selling them more products and services. A purchase is a commitment, and when your customers make big or small commitments to your brand, they are more likely to stick around and become loyal to your brand.
- Engagement and Feedback: People like to be heard and considered, so encouraging them to leave feedback about your company and, later on, fixing or implementing their suggestions shows that you care.
The same goes for engaging with your audience and encouraging them to engage with you – you can do so by sending out surveys, posting engaging content that allows comments or polls, or hosting live social media events.
At Vavoza, we are planning an initiative that will involve all our VIP Members in executing our vision in the coming years – it will immensely benefit our members while further boosting our member retention rate. Join our VIP inner circle to be a part of our big vision to impact the marketing industry and the world!
Closing Remarks
Loyal customers are a huge part of your business, whether you are just starting out or have been in business for a while, so focusing on customer retention is something every business should prioritize.
Focusing on customer-brand engagement, consistently high-quality goods, and customer personalization will not only increase your customer retention rate but also drive more new business for your brand.
On that note, if you value good information and want to build your customer base faster and better, subscribe to Vavoza Insider to receive actionable marketing tips, insights, news, trends, and ideas weekly.
News & Trends: September 2024
Stay informed of what’s happening in the business and marketing world today! Here are some relevant news, trends, and updates you may want to know about:
- TikTok: The TikTok Shop back-to-school campaign drove over 2.1 million users to make purchases. The back-to-school season is not over yet, so if you are in e-commerce, hop on the trend!
- Instagram Stories now have a comment feature available to your followers, but only those whom you follow.
- X was banned in Brazil because of political disagreements. Elon Musk believes in free speech, but apparently Brazil’s Supreme Court judge doesn’t… Don’t be surprised if something similar happens in the U.S. in the current political climate (sad).
- Instagram added new creatives to its Stories and Reels. Many new stickers, fonts, and animations are now available for everyone to use!
- LinkedIn added in-feed video carousels as a new feature to drive video engagement. There are controversial opinions on this, as LinkedIn is a platform focusing on business and careers rather than mindless scrolling. Thoughts?
Subscribe to Vavoza Insider and stay tuned weekly for more marketing news and trends that actually matter today! 🗞️📈
