We have been hearing it for years… It takes significantly more effort to acquire a new customer than it does to retain one.
In fact, current estimates suggest that it can cost 5X to 25X more to acquire new customers, as compared to retaining them. Yet, a large majority of organizations are focused on “new business” (as in ‘customer acquisition’), constantly pouring resources into a leaking funnel. But, what they ought to focus on is retaining their customer base and engaging with them in a meaningful manner.
Here are some ways to do just that…
- Improve Relevance – Understand your unique “tribe” and get to know them better – their needs and wants, what they want from you. Establish mechanisms to listen to your customers – not just an annual C-SAT survey but on an ongoing basis. Then, work on providing relevant products and services that satisfy those needs and wants.
- Build Engagement – Is your customer buying a home loan or a home? Is he/she in the market for a medical insurance policy or for peace of mind? How can we make their journey easier? No, engagement does not equal spending big bucks on media buys, or counting likes on a social post. It takes effort to figure out what really matters to your target audience, and even more effort to give it to them. But the reward is worth it.
- Develop Partnerships – Build partnerships with distributors, channel partners and even other service providers. The world is one large ecosystem, if you’re willing to see it that way. If you are a ride-hailing app (Uber?) your scope of service doesn’t just include matching a driver with a passenger. Wouldn’t it be far more delightful if your regular customers popped inside the vehicle and had the option to play their favorite playlist (Spotify?). Partnerships are a great way to extend your base offering in ways that are meaningful to your audience. Again, relevance is key.
- Build Category before Brand – I can’t recall the number of times I have encountered organizations getting this wrong. Even in a category that is nascent, every brand rushes to build their own brand presence, instead of first building the category. Handhold your customers to help them understand what’s involved. Avoid jargon. Think from their point of view. Test your theories. Validate all assumptions. Simplify. Then, simplify some more. Now you’re on the right track.