Customer Retention: Common Questions Answered



In the initial phases of any business, your main focus will be on capturing the attention of potential customers. You will seek new sales, new opportunities, new ways to market to people to increase your turnover. You’re right at the beginning of your business journey so, of course, you’re going to want to bring in new business to allow you to hit the ground running and provide vital funds to allow you to expand.


There will rarely be a point when a business thinks to itself: “okay, that’s enough new customers now”. Having too much business is one of the perfect dreams of most entrepreneurs, so for most people, new business coming in is always going to be a sign of a healthy, thriving enterprise. However, there will be a point in the life of your business where you turn your attention not just to finding new customers, but to retaining the ones you already have.


By the time your business is a few years old, customer retention is arguably more important than finding new customers. It’s these old customers that have allowed your business to flourish, so losing them to a competitor could be a bad sign for the long-running forecast of your company.


However, there is a tendency for companies to overlook just how important these customers are. For example, take any advert that a company runs offering a discount or a reduced price for services or goods. If you scan the small print, you’ll often see the unpleasant line: “offer applies to new customers only”.


That’s not a good strategy. That’s a sign a business is not focusing on the right area; on the customers who have got them to that point. Any existing customer will look at that offer and think: “wow, thanks for that – that’s what I get for years of loyalty, a higher price?”. And before you know it, they’re not a customer anymore.


So it’s imperative to ensure that existing customers feel they are valued. It’s also important to give them a reason to keep coming back for more, whether it’s their fifth order or their fiftieth. Managing this can be a tough task, which is why so many entrepreneurs have questions about how to do it – so let’s go through some of the most common, and their answers, right now.


How Do You Keep Track Of Customers?


This is one of the trickiest areas of all. If you sell primarily online, then you should at the very least have a history of contacts and order histories for the people who have used your company. That information in its raw form, however, is not particularly useful – it’s just a lot of names, addresses, and order info that doesn’t translate to a simple way of keeping track of everyone. It’s even harder if you sell offline, and might not have the electronic paper trail at all.


That’s why building databases or custom software can be the difference between retaining customers and them forgetting your company exists. With custom software development, you can create a functional piece of software that allows you to input all customer information that is relevant: what they bought, how much they spent, their contact details. You could then be alerted – via the software – if a customer has not bought from you for a long time. That means you could target them for advertising, potentially with promotional rates.


If people have to register for an account to buy from you online, then you likely already have access to some of this information already. However, an important tip: just because someone registers for an account doesn’t mean they want to be marketed to.


Why Is That A Bad Thing?


It’s easy to see why subscribing a customer to a mailing list at the same time as they register an account is attractive. This customer is clearly interested in what you have to sell, so what’s the harm of a pre-ticked box on the account registration form that gives you permission to market to them in future?


Well, it’s annoying. Even if someone has bought from your company, that doesn’t mean they want an endless slew of marketing material – sometimes, they just want to place an order. If you then spam them with emails, they will unsubscribe and have a bad opinion of your company.


That’s why you should always make email subscriptions opt-in rather than opt-out. Let’s be honest; few of us pay attention when we’re registering for an account, so we forget to untick boxes and read the small print. We all do it, even though we know we shouldn’t. There’s no harm in advertising your mailing list during the account registration process, but by making it opt-in, you can be sure that you’re not going to be annoying customers when they receive marketing emails they didn’t know they were going to have.


Won’t That Lower The Number Receiving The Mailing List?


Yes – but a mailing list is only as useful as the people it’s targeting. There’s no point having a large number of people on a mailing list and 90% of them sending every email straight to their spam folder.


What’s The Difference Between Marketing Directly To Someone and A Mailing List?


Above, we discussed the idea that if your custom software informs you someone hasn’t made a purchase in awhile then you should contact them. So what’s the difference between this and a mailing list?


The difference is in how specific you can be. A mailing list is generic, aimed to catch the eye of multiple customers who might have a difference of needs and budgets. If you use your own software to alert you to a long gap between purchases, you can be far more targeted. You could go back and look at the customer records, see what they bought and what they spent, and then send them a gentle: “hey, it’s been awhile, anything we can help you with?” email. It helps to add a sweetener with a discount code, too – that’s one way to immediately cut off any feeling that they are being spammed.


By using these techniques, you’re able to bring customers back to your company without risking alienating them. They feel appreciated; you get repeat business. Perfect for everyone.

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