As we begin 2024, the good news is that it seems we’ve managed to avoid a recession. In fact, the CBO projects our economy to grow 1.5% in 2024; which while positive is still a slower growth rate than the original estimate of 2.5%. Experts attribute this weaker growth rate to less consumer spending.
For businesses in a very competitive market, growing a business by acquiring new customers will continue to be challenging. Today, nurturing existing customers is a more strategic approach to building a business. Existing customers are more likely to continue making purchases with brands they love. They may do this even when cutting back on spending. Their loyalty provides a stable and predictable revenue stream for that brand.
Why are Existing Customers So Important?
Aside from creating a stable revenue stream, spending resources on retaining customers makes financial sense. The cost of marketing to existing customers is generally lower. This is because they are already familiar with your brand and need less convincing to make a sale. In fact, acquiring a new customer can cost five times more than retaining an existing customer.
Also, existing customers tend to spend more money than new customers. Customers are more open to cross-selling and upselling when happy with their initial purchases. Smart marketing leaders collect valuable information about each customer. They use that understanding to offer more products or services based on preferences and needs. This increases the average transaction value and the customer's overall lifetime value. Increasing customer retention by 5% can improve a company's profits from 25% to 95%.
Over time, existing customers develop a sense of loyalty with a favorite business. They are more likely to stick with a company they know and trust rather than take a risk with a new one. This loyalty can lead to long-term relationships, customer advocacy, and positive word-of-mouth referrals. The combination can significantly impact your bottom line for years to come.
The Retention Phase of the Customer Journey
Despite the evidence, B2B marketing teams often overlook the customer retention phase of the customer journey. Instead, they focus on the beginning of the customer journey - acquiring and nurturing leads.
In contrast, the retention phase focuses on keeping customers satisfied, engaged, and loyal. The primary goals are to encourage repeat business, enhance customer loyalty, and turn customers into brand advocates. There are several touchpoints in the retention phase where this can happen.
Post-Purchase Communications
After a customer makes a purchase, an innovative business will continue communicating with them. This communication can include order confirmations, thank you notes, shipping updates, and post-purchase surveys to gather feedback. Some companies often have onboarding programs to help customers get started and make the most of their purchases. Welcome emails and guides are common during this phase. In post-purchase communications, the focus is on building a relationship with the customer, not about immediately making another sale.
Customer Support
Providing excellent customer support is crucial for retention. Businesses should offer various channels for customers to reach out with questions or concerns. AI can be a game-changer in providing timely and helpful customer support through online chatbots. Troubleshooting product videos and FAQs are other examples of offering customer support post-purchase. Outstanding customer service will go a long way in building customer loyalty.
Periodic Check-Ins
Innovative brands periodically check in with customers to see how they are experiencing the product or service they purchased. This can involve sending surveys or asking for feedback via phone or in person. A check-in may offer the opportunity for relevant upsells or cross-sells based on the customer's purchase history. This means suggesting additional products or services that complement or add value to what the customer has already purchased.
By focusing on customer retention, your brand can create loyal customers who not only continue to make purchases but also become brand advocates.
The Power of Brand Advocates
A brand advocate is a customer who openly supports, promotes, and speaks positively about your brand. These individuals voluntarily share their favorable experiences, opinions, and recommendations with others, often in their personal or professional networks. Their recommendations hold a tremendous amount of power. According to a study by Gartner, 75% of B2B buyers consult at least three “sources of advocacy” before they make a purchase decision. Brand advocates play a critical role in building and strengthening your brand's reputation. They also drive word-of-mouth marketing.
Now that you understand the value of customer retention, here are ten tips for nurturing your customers to create brand advocates.
10 Tips for Nurturing Existing Customers into Brand Advocates
The key to successful customer retention is building trust, providing value, and consistently exceeding customer expectations.
1. Understand Your Customers
The first thing any marketing team should do to nurture customers is to learn about their needs, preferences, and pain points. This knowledge enables you to tailor your communication and offerings. It helps you better meet their expectations. The simplest way to ensure your entire team understands and empathizes with your target audience is to create buyer personas. A buyer persona is a detailed profile of your ideal customer based on market research and customer data; and, depending on your business, you may have more than one. Personas are a fantastic tool to help your team align your marketing efforts with your target audiences.
2. Personalize Every Touchpoint
With customer personas, every customer touchpoint should be highly personalized to that customer. Personalization nurtures customer relationships. Use the customer's name in every communication. Recommend products based on their purchase history. Tailor your messages to their preferences. Personalization enhances the customer experience and strengthens the connection with the brand.
3. Provide Valuable Content
Create and share content that adds value to your customers' lives. This could include content that aligns with their experiences with your products. It could also reflect their personal interests and challenges. For example, user guides, tutorials, and how-to articles help customers make the most of your products or services. Clear instructions and guidance contribute to a positive user experience. They also increase the likelihood of customers staying engaged. Providing educational content ensures that customers understand the value of what they've purchased. It encourages them to stick around for the long term. Also, keeping customers informed about product updates, new features, and upcoming releases through content helps maintain their interest. Regular updates show that your brand is actively improving and maintaining relevance.
4. Encourage Brand Loyalty
Brand loyalty programs can be lucrative for any business. For B2C businesses, 83% of consumers are more likely to continue buying products or services from brands that offer a loyalty program. In the B2B space, there is a significant opportunity for innovative brands to leverage a customer loyalty program. According to Gartner, only 10% of B2B businesses focus on retaining existing customers.
Loyalty programs reward customers for their repeat purchases. Each reward builds a positive relationship between the customer and the brand. Offering discounts, exclusive access, or other incentives can encourage customers to feel valued. This could include sneak peeks, special promotions, or premium content reserved for loyal customers. Many loyalty programs engage customers with gamification like challenges, badges, or points leaderboards.
B2B loyalty programs are usually subscription-based and focus on rewards that provide enhanced business services or experiences for the client and/or their team.
5. Referral Programs
Referral programs can accomplish two essential business goals. They leverage the power of satisfied customers to bring in new customers. They can also reinforce existing customer relationships. Referral programs provide existing customers with incentives for making recommendations. The incentives may be discounts, rewards, or exclusive access to new products. When a customer refers a friend or colleague, they are essentially vouching for the brand's quality, reliability, and value. This incentivized loyalty also encourages existing customers to stay engaged with the brand. Customers who take part in referral programs increase their own customer lifetime value.
6. Foster a Sense of Community
Creating a community around your brand encourages customers to share their brand loyalty and advocacy with others. This can deepen their connection to the brand. Build online forums, social media groups, or customer communities where customers can connect, share experiences, and support each other. Influencer campaigns can be a powerful social media tool for building a brand community. They leverage the trust and authenticity that influencers have with their audiences.
7. Seek and Act on Customer Feedback
Your customers are your most powerful market research resource. Encourage customers to provide regular feedback and reviews on your products and services. Also, ask for feedback on your customer service and marketing strategies. Use surveys, focus groups, and other market research strategies. This information can help you identify areas for improvement. It can also help you understand what drives customer satisfaction. Feedback can also give your marketing team positive testimonials for marketing strategies. Best of all, asking for feedback shows customers that their opinions are valued.
8. Offer Exceptional Customer Service
86% of buyers will pay more for a great customer experience. Customers who receive outstanding service are more likely to feel satisfied, valued, and loyal to a brand. Provide excellent customer service at every post-purchase touchpoint. This means promptly addressing inquiries, resolving issues, and going above and beyond to exceed customer expectations. 78% of consumers will do business with a company again after a mistake if they experience excellent customer service. A positive customer service interaction can turn a bad purchase experience into a loyal customer.
9. Surprise and Delight
"Surprise and delight" is a customer service strategy aimed at exceeding customer expectations by providing unexpected and positive experiences. This approach goes beyond meeting basic customer needs. It involves surprising customers with unexpected gestures, perks, or personalized touches creating a sense of delight. The goal is to create memorable and positive experiences, contributing to customer retention. For example, celebrate important milestones with your customers. You can recognize anniversaries or birthdays with an exclusive gift or offer. This shows that you value the relationship.
The keys to successful customer retention and creating brand advocates are building trust, providing value, and consistently exceeding customer expectations. Combining and adapting these ten tips to fit your specific industry and customer base can contribute to a robust brand advocate marketing program.
10. The Phase 3 Approach
Our marketing approach is solutions-oriented rather than product-focused. We offer a consultative process in which we collaborate with our clients to find the best path forward for their unique business needs. The goal isn’t to sell a particular channel or tactic. It's to help our clients meet their business goals.
Our team understands how critical customer retention is to our client’s overall business. If nurturing your existing customers into brand advocates is your marketing team’s main goal, we can help you build an effective customer retention marketing strategy. Contact us today to set up a discovery call.