How To Maximize The Value of Every Customer
When you run a business, there are generally three ways that you can make more money;
Increase your prices and make more money per transaction
Increase your customer base and serve more people
Increase your transaction volume and sell to your customers more often
Finding new customers is more expensive than nurturing the relationships that you have with existing ones. So, implementing strategies that keep old customers engaged for longer is often the easiest way to increase revenue.
That’s why, as a business owner, you should treat your existing customer relationships as an asset and invest in them for the long-term.
The Benefits of Reinvesting In Your Existing Customers
Loyal customers who’ve had a great experience are your secret weapon. When given the chance, these happy customers are more likely to recommend your product or service and promote your brand for you. In this way, nurturing your exiting clientele can further reduce spending on brand awareness & customer acquisition campaigns.
Additionally, those who have bought once are usually more likely to buy again. In fact, Facebook’s VP of Growth once said, “If you have less than 25% return customers, you’re missing out on additional revenue”. Repeat customers are a massive pipeline that you need to be able to tap into.
If you want to make more money in your business, here are 5 profitable ways to invest in your existing customers.
Measure Customer Lifetime Value
Always keep customer lifetime value (LTV) in mind. This metric will help you estimate the amount of business you can expect from a person who transacts with you over the long-run. LTV will vary from one customer to the next, but as you gather more data over time you can begin to see and analyze trends.
For example, people who purchase your entry-level product may have a lower LTV than customers who buy the mid or higher-tier products.
Consider using a Customer Relationship Management platform (CRM) to collect information and get a better understanding of who your most profitable customers are. You can then target those customers with specific marketing campaigns. Here are a few more useful tips to see an increase in lifetime customer value.
Create Customer Retention Marketing Strategies
It’s wise to set aside part of your marketing budget for customer retention and engagement campaigns. Some creative customer retention strategies that you can try include:
Free gifts
Discounts for referrals
Onboarding sequence
Customer feedback programs
Recognize your customers with a social shoutout
Engage with your customers when they post on social media
Here are 15 customer retention strategies from my favourite (Free-ish) CRM, Hubspot.
It’s important for your customers to feel valued, so reward them for their loyalty. Give them a chance to get early access to exclusive info and new products. They will appreciate the fact that you show love when you can.
Invest In Customer Retention Tools
While you’re running your customer retention campaigns you need to closely monitor their progress. This will teach you which marketing strategies are most profitable. There are several advanced tools to monitor customer retention that can help you understand a little more.
Some key systems and tools to setup will help boost your retention rates are:
Customer support. This can be in the form of an FAQ page that is frequently updated or you can create a private library of canned responses to help troubleshoot common issues with clients faster via email or phone.
Chatbots. A chatbot is actually pretty easy to set up these days, especially if you run your online store on the Shopify platform. You may have come across a friendly AI helper on the internet who messages you while browsing to ask if you need help. These bots are preprogrammed to answer common questions that minimize the need for live customer service calls. Of course, no bots are perfect though.
By collecting as much data as possible, you will be able to learn a little more about your customers and how you can make the most profit from them.
Get Existing Customers Working For You
If you’re looking for ways to save money as a small business you could get existing customers working for you.
The benefits of a referral campaign are two-fold. When done effectively, you’ll not only gain new business, but you’ll also be rewarding your existing customers. It’s a win/win.
You could offer your best customers a discount for recommending a friend. This will both improve customer retention and expand your reach in the market.
Set up a call-to-action on social media or via email marketing to entice your followers to promote your business for you. This is a very cost-effective marketing solution that can pay huge dividends.
Provide A Personalized Service
Today’s consumers have high expectations when it comes to service. They’re looking for personalized experiences based on their preferences. Consider ways that you can add a custom touch to the products you offer and the way that you communicate with your customers.
Be as personal as possible in your marketing campaigns as well. One of the easiest ways to add a personal touch in email marketing is to use merge tags. All CRM and Email marketing platforms will allow you to craft messages with auto-populated information in the subject line or body of the message. This way you can create personalized messaging based on datapoints held in your CRM.
3 Ways To Automate Personalization In Email Marketing
Call your customer by name. When a new lead signs up for your email list or buys one of your products their name will be stored in your CRM. When you create an email blast to send out to all or a specific group of your customers, you can use merge tags to call each individual by name in the email.
It feels more human to get an email that says “Hi Courtney” rather than just “Hi…”
Follow up on a sale. Check-in with your customers at a set time after purchase to see how they felt about their experience. Depending on the sophistication of your CRM, Email marketing platform and eCommerce platform, you can set up an automated message to go out at a set time after your customer completes a transaction.
For example, 7 days after buying an online course you can have an email sent out that says, “Hey Courtney, I just wanted to check in with you to see how the course is going. If you need any help I’d be glad to answer any questions you have…”
If your customer responds positively to your follow-up email, it would be a great time to ask for a testimonial or review. Automating the collection of social proof is a big key to building a successful brand from scratch.
Send a birthday discount code. As a way to reengage past customers and reward their loyalty, consider sending them a discount code that is valid during their birthday month.
If your running a free email platform, at the beginning of each month you could simply send a mass communication out to all of your customers born that month with a universal “OctoberBaby” discount code to save 10% at checkout. It takes a little work, but still relatively quick and easy.
Full automation might be a little harder to set up, but if you can figure it out on the back end then it’s another great way to increase LTV for your customers.
Final Thoughts On Investing In Existing Customers
Anything you can do to boost loyalty and improve the customer experience is going to pay off for you in the long run.
If your business struggles to get repeat customers, then you are going to be tasked with the burden of starting from scratch every single day. Of course, you will have to find new customers every month to continue growing, but you can greatly improve your profitability if you learn how to extend the length of your relationship with each individual that you serve.
That’s why I always say service has to come first. Focus on providing max value to your customer and making sure they're satisfied. After all, happy customers help the bottom line.