Estimates vary, but it's very clear that generating a sale from an existing customer is much easier than doing so with a new one. According to Marketing Metrics the "probability of selling to an existing customer is "60 - 70%. The probability of selling to a new prospect is 5-20%" With that information in tow, it becomes increasingly obvious that as marketers we should be tripling our effort on these existing customers versus our new ones. The problem is retention is so much less sexy than acquisition. How do we attack this reality and address it? At our firm we espouse:
"The 5 Sexy Rules of Customer Retention"
- 1. Recognize customers from their online footprint
This one requires the highest degree of technical aptitude and might actually be the newest of our five. The principle here is that if you have a log-in feature and returning customers come back to your site and are sticky than you win. Customer portals are a strong and deep ways to tie together a customer with a brand and if your customer comes to you without any pushing than you are doing a great job (same thing if they download your app). The more complex and technical way to approach this is to try and utilize data in their application that "recognizes" this customer and can verify their identity through a series of questions. A brand we work with employs this exact technique and the form fill rates for those returning customers dwarfs that of the new users (approx. 61% versus 31%).
- 2. Reward them with stuff
Give them a hat. Or an umbrella. Whatever you want to give them is great. People love free stuff. A non-scientific study of this subject points out that 100% of people love free things. On a serious note, a timed reminder of your services can be an incredibly valuable tool for any business. Obviously there can be a great degree of cost here and your boss might ask why we are spending money on a customer we already have, but the point is you need to do this. Just one lifelong customer can come from the nice pen on their desk or the calendar in the office.
- 3. Reduce friction when possible
From cart abandon rates to lost passwords there are people and industries dedicated this exact pressure point in the customer experience. We all want to be able to complete our task quickly. If we forgot the username and password it is just one more thing we have to do before we finish our task. If our credit card number isn't validating on a form, we are going to grow impatient. The point is you need to test and re-test your fill rates. Try different names on your form fields to see if you can get folks through quicker. A service like Optimizely is a great one for this kind of testing (this isn't a plug-it is simply an awesome product).
- 4. VIP treatment via email
Email is the delicate third rail of customer retention. We want to stay in front of our customers but we also don't want to piss them off. How do you deal with this? With kid gloves. Be sure to test with minimal saturation in the beginning. Monitor those spam complaints and do not bombard these valuable customers.
- 5. Don't be dumb
Don't do dumb things. Don't sell lists of your most valuable customers. Don't remarket unrelated products to them. No, your valuable customers don't want to hear from you about unrelated products that have nothing to do with your core competencies.
Just be smart with your returning customers. They are your more valuable commodity (aside from your staff). Be good to them. Nurture them. Treat them like friends-after all, they are!