How to create loyal customers that refer
When you’re a small business or a one human band every single penny counts, so if there is something that can make your marketing budget work harder its worth looking in to right?!
So in this blog post we’re going to be taking a look at creating deeper connections and how to improve your customer experience with the power of retention and referral strategies, from benefits of getting folks coming back for more to the tactics you can use.
The Benefits
Cost-Effectiveness
Retaining existing customers is not just about keeping them satisfied; it's also about being financially savvy. Acquiring new customers can be up to five times more expensive than retaining existing ones. By implementing a retention strategy you could optimise your marketing budgets, allowing for growth, hiring, or putting more money away in your “rainy day” pot.
Amplifying Your Efforts
It takes a LOT of hard work to keep all those marketing plates spinning, socials, emails, creative content, PR so how amazing would it be to have some of your current customers help to spread to word about your fab business? By providing your customers with an excellent experience, or a little incentive, they could be your most powerful marketing tool for brining aboard new customers.
Easier to Predict
Retained customers have already demonstrated they like what you do - they have brought from you. By nurturing that relationship further you'll gain further insights into their likes, dislikes and buying patterns. Which you can respond to with other products / services they may need and follow up with targeted marketing campaigns that showcase similar items that they are likely to buy. This is going to help you to predict not only your income but also what products / services will sell best at what time and helps you to shape your marketing efforts around that intel.
Key Strategies for Retention and Referrals
Customer Experience
Studies show that 60% of consumers become repeat customers after an excellent experience with a brand. That is a huge amount of people!!
So, really understanding what your customers expect and then nailing their experience of buying from you can really supercharge your customer retention.
When it comes to getting customers to come back to you for more, and also recommending you to their friends and family, their experience of buying from you needs to be memorable for all the good reasons.
Whilst you're not going to please all the people all the time, there are loads of ways of making sure that our customer experience is the best it can be.
Firstly take some time to *really* get to know your customers. Not only does this really bring to life who you are marketing to but it’s also the base of everything you will be doing in terms or marketing and developing your business to. Understanding your customer better helps you to build an experience that you know is going to wow them and what sort of interaction will further enhance that experience.
Segment your customer data so that you can better personalise your marketing activity. Using your CRM to segment your data means it will be a lot easier to personalise your comms to reflect their interests and preferences.
Create Value Added Content. This is essentially marketing nerd speak for content that isn’t just about selling. Things like blog posts, how to videos, podcasts and webinars are all great examples. They provide relevant and valuable information that is useful to your customers and helps to build more of a community around your brand. A nice little side effect of this is that these types of content can also help improve your SEO rankings.
Make the experience of buying from you as pain free as possible. Look at all aspects of the buying journey, is it easy for someone to find products and pay? They aware of timescales, how you work, what to expect next?
Feedback
We all know that getting positive reviews is great, it gives us the warm fuzzies and it shows potential customers how awesome you are. But obtaining customer feedback is also a great relationship building tool to.
It helps you to iron out any niggles and helps you to identify new products and services that you customers are crying out for. PLUS, encouraging customers to share their feedback with you shows them that you are committed to delivering the best experience possible.
Satisfied customers who see their feedback implemented are more likely to become advocates for your brand so will naturally recommend you to colleagues, friends and family.
Referral and Reward Programs
Referred customers are 4 x more likely to buy and whilst referrals and reward schemes feel like a big brand marketing tactic they can also work really well for small businesses to. Before you start looking at what reward / referral tactic to implement - refer back to your ideal customer. That will help you to really pin down the best option for your business.
Great options for smaller businesses:
Loyalty Programs: Whats great about these are that they are easy to implement, track and your business doesn't need to be at a certain level of maturity. For these you can offer rewards or even convert £ in to points if thats easy to do. These rewards are then redeemed against the next purchase. Budget wise if things are tight you can add in certain thresholds. Like you have to spend a certain amount of money before the benefits can be used or only allow them on certain products / services.
Referral Programs: Are all about getting your current customers doing the leg work for you, getting them to refer friends and family by offering them rewards such as discounts, free products, or store credit for each successful referral.
I found that the ones that work best tend to be ones that offer an incentive for both parties for example £10 for the referrer and £10+ a free gift for the referred person.
Limited-Time Offers: This is all about creating exclusive promotions or flash sales exclusive that are only available to loyal customers. It’s great for fostering a feel of exclusivity or when you want to drive immediate action around a specific product / service.
Collabs: Another budget friendly tactic is partnering with another other small businesses. It splits the cost of implementing a referral scheme as well as increasing your reach. Works well if the products / services complement each other so for example a pub and a café that sells breakfasts. A Photographer and a social media expert.
Special Day Rewards: If you’re in a space where perhaps having a regular rewards isn’t something you can do right now. Rewarding special days such as anniversary of customers first order or their birthday is a great way to show appreciation without tying yourself in to a regular thing.
Measuring Success
Developing and implementing a retention and referral strategy can be hard work so it's important that all that work is bringing in results. Tracking customer retention rates, referral program performance, and the impact on overall business growth will provide you with valuable insights for future decision-making.
Analyse your results against the goals you have set but also look for other wins / lessons learnt / trends that you can use to adapt your strategy and get better results.
