3 Retention Management Strategies for Small Businesses That Give Results
- June 8, 2022
- 4 minutes read
The goal of retention management is to increase repeat business and the profitability of your current customers by ensuring they stay with your brand over time. And when it comes to growing your small business, not only is retention much cheaper than clientele acquisition, but retention statistics show that just a 5% increase in loyalty can boost your profits up to 95%! Here are the three most effective strategies to help you answer your customers’ needs and wants and strengthen their loyalty to the brand overall.
#1 Implement Reward Programs
In today’s competitive market, as a small business owner, you will be catering to consumers who are well aware of their many shopping options. The contemporary customer understands how vast the market is and has only one expectation when choosing a brand: to get their money’s worth. Very often, this notion of value surpasses the quality of your product or service to encompass a broader desire of customers to feel recognized and seen by a brand.
According to consumer incentives research, more than 92% of consumers claim they consider rewards when deciding between multiple brands. Furthermore, Brand loyalty statistics show that customers expect not only to be rewarded, but almost 30% expect reward programs to be exciting and innovative. To help you get creative, we have a few recommendations that will help you create reward programs that cater to your clients’ wants:
- Provide discounts or gifts to customers who write reviews;
- Make loyal customers feel special with members-only incentives,
- Use social media platforms to host giveaways for loyal followers.
#2 Focus on Customer Care
Customer care is all about creating an emotional bond with your clients. As an aspect of business, it is so vital that according to CSAT stats, the lack of proper care for clients leads to the highest churn percentage. Specifically, more than 68% of people stress that the main reason they stop purchasing from a brand is because of the perceived indifference of said store.
Give your customers a reason to come back by showing them you care. And the best thing about customer care is that, at the same time, it’s a very inexpensive strategy that provides astonishing results for customer retention. Just gifting your clients samples of products outside of their orders or simply writing heartfelt thank-you notes will go a long way.
Pro-tip: Provide your loyal returning customers with discount codes after every third, fifth or tenth purchase. This way, you’ll leave them with the sense that their loyalty has value in its own right.
#3 Carry Out Referral Programs
If you want to kill two birds with one stone (i.e., customer acquisition and retention), referral marketing is the strategy to incorporate. The goal is to get current customers to refer your business to their loved ones and reward them for each paying customer they bring in. Although referral marketing’s ultimate goal is to acquire new clientele, it leads to a high increase in customer loyalty and repeat purchases, especially when the reward obtained by the referrers is redeemable on a future purchase.
According to Yale and Berkley’s research findings, reward gives current customers a reason to recommend your brand to their loved ones. However, since a recommendation can impact the personal credibility of the referrers, it creates a psychological byproduct of reinforcing their commitment to your business. One-time discounts, store credit, and free one-month subscriptions are the perfect referral program rewards as they keep your customers engaged with the brand. Provide your clients with a few dollars off their next cart, a 5% discount on selected premium products, or a gift card they can use or give to a loved one.
Gaining new customers is always wonderful but it’s better to invest in retention programs if you really want your revenue to grow. Don’t wait for your clients to lose interest to implement change, but rather be proactive with their needs and wants. And remember: a happy customer is the base of every successful business, so make sure your relationship with the clientele is always thriving.