Traditionally, the priorities of marketing have always focused on acquiring new customers and driving sales, with retention placed at the bottom of the proverbial totem pole. But that strategy belies hard facts: that your existing customers are more valuable to your business than new customers. According to research done by Bain & Company, returning participants tend to spend 67% more than first-timers. And over the course of a year, loyal customers are worth ten times more than newbies! More loaded facts? Harvard Business Review study has shown that increasing customer retention by 5% can ultimately increase profits by 25% to 95%. So now there’s the critical million dollar question: what's a strong retention marketing strategy that works to help you retain your current customer base? Let’s discuss...
What Won’t Work
Don’t think that relying on product differentiation to keep your current customers interested is going to fly. With more options than ever, your events are bound to be similar to others. And since pricing competition is all but dead, you won’t be able to rely on being the lowest cost event. Additionally, you should remember that the lowest price doesn’t always equate to the best value. In fact, “Two-thirds of consumers state that they are willing to spend more with a company they believe provides,” more value. All this insight indicates that many of your current marketing efforts may be doing your bottom line few favors. Offering blanket discounts and blasting mass email campaigns could prove to be wasted effort, hurting your ROI. Why? Because of that little factoid, we referenced above. The one that shows consumers are now shopping for value and experience.
So What Should You Do?
Your priority should be a shift in thinking. Just as consumers have shifted focus from price to value, your strategy should shift from prioritizing the value of the single acquisition to prioritizing a customer’s lifetime value. Once it's evolved, implementing new initiatives to prioritize retention will become an easier effort. Now that we’ve covered the basics, what initiatives can you undertake to improve your customer retention rates?
Invest in Reciprocity
Like we said before, doling out blanket discounts and freebies can cost you. But creating a culture of reciprocity with your customers has proven to be effective. Small, thoughtful gestures will have a much bigger impact than random promos. The gesture doesn’t have to be large or even monetary. After all, it is the thought that counts. Need an example of things you can do? Try sending your customers a birthday email with a $5 discount. Or let them reach VIP status and share their perks with a few friends and family. You may even want to offer a freebie to your customers who refer you more business, encouraging them to continue to act as your best marketing tool. It’s possible to make your reciprocity efforts work extra hard for you, by making it a surprise. The more customers spend, the more they feel they’ll get a reward in return, even if it’s entirely random. This research can have substantial implications for your marketing strategy as it shows that rather than promoting blanket discounts or set rewards programs, your business can benefit from random one-time rewards to your big spenders.
Fast Runners Don’t Necessarily Want Fast Customer Service
It’s not that customers don’t want timely customer service, it’s that they want more than just speed. In our increasingly connected world, access to customer service is easy for consumers. But what isn’t ever-present? Quality customer service. Consumers consistently rate a quality and complete customer service experience better than a fast one. In fact, your customers will be nine times more likely to be engaged and purchase ready for businesses that value quality over quickness.
Treat Your Customers Like Individuals, Not Data Points
By personalizing the customer experience at as many touch points as possible, you’re proving to them that you value their individuality and don’t see them as just another cog in your marketing wheel. Some simple tips on how to do this:
- Market to them with content that’s relevant and timely
- Give them a bespoke event experience with customized bibs and a personal results page with a downloadable finisher certificate
- Give any fundraisers a customizable page to bring in donations
Make Your Efforts Communal
Consistency is key, and your whole team needs to be onboard to keep your customer experience streamlined. Utilizing a powerful CRM will help give your entire team access to all the necessary data to provide each customer with the best experience every single time. To focus marketing efforts on retention can feel like you’re betraying your most basic business instincts, but the success you'll gain by stepping outside of this box is backed by sufficient data. In the end, it all boils down to knowing your customers better to build better relationships, and that is something you can’t be short changed.