There is so much emphasis placed on new client acquisition that you could be forgiven for thinking that new business is the only way for companies to generate the majority of their revenue. Everywhere you turn there’s new content about how to get more customers, how to generate more leads… not to mention the number of software services that are advertised to help companies increase their customer base.
A lot of marketing conversations revolve around lead generation, and there’s a very good reason for this. For any business to thrive, it is vital to have a steady stream of new customers walking through the door. Everyone already knows and understands this principle, and the benefits of new business acquisition are obvious and well known. This is probably why the majority of sales and marketing strategies place a lot of focus on new client acquisition.
But here’s the thing: acquisition isn’t the end of the road.
Some companies fall into the trap of focusing too heavily on acquisition, then forget about their shiny new clients almost as soon as they’ve been onboarded.
Problems can arise when new clients aren’t properly looked after, as this can leave them feeling as though they aren’t valued. In the worst cases, this can lead to a poor customer experience, resulting in high levels of churn. Not only is this counter-productive, but is also a huge waste of the time and money spent drawing in these customers in the first place.
But there’s a silver lining: this does mean there’s a huge opportunity for growth. It has been found that by retention by just 5% could boost profits by 25-95%, so it’s in every company’s interests to make sure that new customers are well looked after.
The truth is, companies rely on both acquisition and retention for maximising revenue and growth. So if your strategy places more emphasis on one or the other… you may find yourself losing out.
As ever, the key lies in balance. Here are six ways to help you effectively balance your acquisition and retention strategies, to make sure that once your clients are brought on board, they stick.
1. Make communication easier
In an ideal world, a customer wouldn’t ever have to speak to you once they’ve purchased/subscribed to your service; everything would pan out smoothly and there would be no requirement for further communication. As we all know, in reality, things happen which mean customers do need an avenue to speak with a customer services agent.
Often, getting in touch with a company to rectify an error will be an inconvenience to the customer, so it’s important to make this process as seamless as possible so the customer can be back on their merry way in no time. With customer service being cited as one of the most important factors in a customer’s decision to stop doing business with a company, this is incredibly important to get right.
Providing clear and efficient channels for communication can help to improve the customer’s holistic experience when interacting with your brand. Offering a variety of channels, such as live web chat, video calling, phone calls, direct messaging though social media and others allow customers to choose the most convenient way for them to contact you, making the company appear more accessible and helpful. Chat-based contact channels like live web chat have also been shown to help reduce contact centre waiting times, in turn making your customer services processes more streamlined and customer-centric.
2. Follow through on your promises
The key to striking a balance between customer acquisition and retention lies in recognising that they are both as important as each other, and that they are both part of the same process.
When acquisition and retention departments don’t communicate with each other properly, and therefore act as completely separate units, this can sometimes lead to a disjointed customer journey. For example, during the acquisition phase, a sales advisor may use tactics to entice the customer to sign on, such as an introductory offer or additional perks on their subscription. The customer has been treated with flexibility and accommodation, and the treatment they had experienced was likely a factor in their decision to purchase with this company in particular.
However, if the retention team don’t mirror the style of service to which the customer has become accustomed, this can feel as though they have been duped in some way and can ruin the customer’s view of the company and potentially cause them to churn.
Acquisition teams must work together with retention teams to understand what the other does, and their philosophies around how they represent the brand. If these don’t align, this will become clear to the customer and retention rates will continue to decrease.
3. Use customer journey mapping
Customers can encounter your company through a multitude of different ways, so it’s good to understand customer journeys so that you are able to pre-empt and anticipate which way your customer is likely to turn next. Customer journey mapping is a great method to use for both acquisition and retention teams, and both can use each other’s findings to create a smoother customer experience.
Marketing teams make use of tools like Google Analytics to understand the different ways customers initially discover the company and pathways customers take through the website. Acquisition teams can then use the data collated from this to make informed decisions about how to generate more leads. Beyond that, they can find out the most popular routes to purchase which can them be optimised to maximise the opportunity for conversion.
Once the customer is on the website and has begun an engagement via live web chat, analytics tools like Talkative’s customer journey mapping can send teams a breakdown of which web pages that customer has visited, and the length of time they’ve spent on each page. After collating data from multiple customer journeys, a picture can be formed to highlight patterns which can reveal both the most lucrative parts of your website, as well as areas which may need further improvement.
4. Let existing customers know about new products
Here’s a fun fact: Did you know that existing customers are 50% more likely to try a new product than new customers and on average spend 31% more?
There are many reasons for this, but let’s go back to basics and apply some common sense to why this is. Existing customers have already done business with you before, so they know what level of service they can expect. If the experience the first time around was positive, there’s no reason to assume that the second time would be any different, as the foundations of a strong customer-brand relationship have already been laid.
As such, your existing customer base is a great place to start when launching a new product or service, as they will likely be much more receptive to it.
Existing customers are also much more cost effective to upsell to, as they have already gone through the tough initial stages of marketing funnel. This means there isn’t the need to spend money on building brand awareness, information and conversion- the customer is already familiar with your brand so doesn’t need anywhere near as much advertising to convert them.
5. Maintain your reputation
Word of mouth is one of the most powerful marketing tools on the planet. According to Neilsen, 92% of people trust a friend or family member’s recommendation above any other form of marketing. What’s more, 88% of consumers trust online reviews posted by other customers as much as they would trust recommendations from personal contacts.
There are lots of ways you can encourage your customers to spread the word about your company and the experience they’ve had with you. Some companies incentivise customers with prize draws or rewards, whilst others offer discounts or gifts for customers who refer colleagues, friends or family to their services.
But in reality, this will only work if your customers believe that their experience has been good enough to warrant a genuine recommendation in the first place- as it’s their reputation on the line as well as that of the company. As such, the validity of this technique relies on your overall reputation management.
6. Don’t take your eye off the ball
We’ve been talking a lot so far about the importance of focusing on customer retention, but this doesn’t mean you should take your eye off the ball when it comes to acquisition. Other than the obvious benefits of acquisition, like increasing brand exposure and increasing your market share, there are other, less obvious benefits which are equally as valuable.
One of these benefits is that acquisition keeps companies actively engaged with changes in the market, emerging trends and competitors. Applying some of this information can ensure your company’s services or products remain relevant. In turn, this will ensure that your existing customers aren’t forced to move across to a competitor who offer more up-to-date products.
In summary, the most effective method of growing your customer base is to use acquisition techniques which complement the strategies your retention teams currently use. Without alignment across both teams, customers won’t experience the best possible service and will continue to churn.