One of the defining questions of any business is how to achieve growth. Proprietors are no exception. A study by Exact found that 69% of professional services firms consider attracting new customers to be the biggest overall challenge in the market.
That’s why it’s vital that you have a retention strategy in place. Competition for new clients is fierce and acquiring leads and attracting new prospects can often require a lot of time and investment, more on that in a moment.
For anyone still wondering why retention should be a core part of a proprietor’s strategy, here is some food for thought.
On average, loyal customers are worth 10 times as much as their first purchase, since they’re more likely to spend more when they return. Equally interesting, a 2% increase in customer retention has the same effect as decreasing costs by 10%.
Customers who return are much more likely to recommend you to their friends and family, thus further reducing marketing costs. A study by Nielson found that a whopping 84% of consumers either completely or somewhat trust recommendations from family, colleagues and friends about products and services – making these recommendations the highest ranked source for trustworthiness.
Studies show that even a 5 per cent increase in retention rates can equate to more than a 25 per cent increase in profits. The key is communication, which invariably increases your customer’s experience of your brand.
Going above and beyond by proving yourself as a valuable knowledge provider that can help them achieve their goals, places you in a power position. You could, for instance, send a bi-monthly newsletter offering tips on managing personal finance, and recommend helpful apps and services that you’ve found particularly useful.
The goal is to enhance trust by over-delivering, which significantly increases the chances of retention.
Proprietors who employ a customer retention strategy will not simply see the same customers return purely for the same service. Through the building of trust, it’s been shown that customers are more likely to return to the same proprietor for more services if they’ve had a good experience the first time.
Equally important is the ability to turn customers into brand ambassadors. This can be prompted by offering a referral bonus to reward clients who generate new leads for you; ideally you’ll then end up with two happy customers.
Turning customers into brand ambassadors has been an idea knocking around marketing teams for a good few years and upping your level of customer engagement could help set your business apart from the rest.
A good first step in enhancing engagement with customers is to ask for feedback, you could use our template here. Getting their honest opinions will help you identify areas to improve, and re-engage with useful content on the topics they raised in the feedback. The result is a customer getting the impression you care, and are prepared to work with them to ensure you provide the best possible service, tailored to their needs.
If you’d like to find out more, check out our comprehensive guide: How proprietors can increase customer retention.
Yorkshire Building Society would like to remind proprietors to make sure that you are compliant with General Data Protection Regulation when carrying out your customer retention strategies.
Yorkshire Building Society has worked together with a growth marketing agency, ClientsFirst, to supply this content. We hope it helps you grow your non-YBS business and you have found it of interest. Please ensure that if you apply any of these tips to your YBS agency, you comply with the specific marketing guidelines which can be found in the YBS ‘Working Together’ Agency Operations Manual.
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