Are you Paying Attention to Customer Retention?
In an ideal world, the tremendous amount of time, money, and energy you spend in building a great business; educating your audience about it; attracting them to your company; and finally turning them into paying customers would be rewarded by a long, profitable relationship between you and the newly-acquired customer(s).
But this is not that world, is it? You know that customer relationships are far from ideal.
However, did you know…
Losing customers is easier than you think
96 percent of customers have no qualms in walking out the proverbial door if they are
unhappy with your either your products or services and/or your manner of delivery.
Think that’s rough? Wait until you learn how easy it is for businesses to lose customers in today’s mega-completive age. Simple negligence or misconduct on social media – such as making rookie mistakes on Twitter (like over-tweeting), are enough to push customers away.
There are a host of other factors that can do the same.
Overall, you lose customers because of one or more of three primary reasons. Researchers of a Washington DC used a customer survey to find out the main reasons customers stop doing business with a company or service provider:
- Poor customer service is typically the reason for 68 percent of the deferring customers, who cite poor attitude of the customer service representatives or complete indifference on their part as the trigger to leave. Consequently, poor customer service costs an estimated $83 billion in losses to US companies on an annual basis.
- For 14 percent, dissatisfaction with the quality of product or service delivered is the key trigger to leave the current company and take their business elsewhere.
- Another 14 percent get lured in by competition with the promise of a better or more valuable deal.
Apart from these reasons, which mark willful abandonment of a company, the other reasons why you lose customers are relocation (in about three percent of the cases) and death (in about one percent of the cases).
Losing customers is costlier than you think
Globally, companies lose an average of $243 on every customer they fail to retain.
This figure is tabulated by considering the average of lost sales and revenue. What this figure does not include is profit loss associated with wasted acquisition costs. The real cost of lost customers also includes losses created by the ripple effect of a customer leaving.
- 95 percent of customers who are unhappy with your services and are contemplating a change do not complain to you. They leave without making a noise, which gives you no opportunity to right the wrong and win them over before they make the final shift. But they don’t just keep quiet about the bad experience…
- About 13 percent of the unhappy customers talk to their friends. Things get worse.
- While a happy customer is known to talk about the positive experience to about three or five people, an unhappy customer is known to complain about it to up to 20 people! You can forget about those 20 people bringing their business to your company.
- Furthermore, a lost customer can cause serious damage to your reputation. This is especially true if the customer had a particularly bad experience with customer service and is rather furious. You may already know how a delighted customer tells his friends but a furious customer tells the whole world. Social media has made that easier than ever before. Back in 2015, an unhappy Virgin Airline passenger wrote about his in-flight experience, which has been re-tweeted 1134 times, and has more than 3000 backlinks, and is being shared even today!
The bottom line? A lost customer costs you significant business dollars in terms of not just lost sales and revenue but also lost reputation and market share; ultimately affecting your profit margins more seriously than anticipated.
Your loss is your competitor’s gain
61 percent of lost customers go straight to a competitor when they are unhappy with their current company. Think about that. If your negligence or misconduct is the reason why you lost say 10 customers in a month, it is also the reason why your competitor gained six new customers in the same month.
The majority of businesses have it wrong
…And that probably includes you as well.
The majority of businesses continue to focus on customer acquisition when in fact they should be focusing on customer retention. 63 percent of marketer’s identify customer acquisition as the number one goal of their advertising campaign.
So why is that wrong? For the simple reason that mere customer acquisition is not the path to sustained profitability. And why is that, you ask?
80 percent of your profits come (and will come in the future) from just 20 percent of your existing customers. It’s the Pareto Principle at work. Makes sense therefore to focus on the top 20 percent of the existing customers, doesn’t it?
They are your most loyal customers and they are your primary source of sales, revenue, and profits. Focusing on nurturing your relationship with them is both natural and desirable.
Yet, most companies fail to focus on the right thing – retaining existing customers and nurturing them into highly loyal customers. The need to focus on retention becomes even more clear when you consider that fact that:
- Acquiring new customers is costlier than retaining current customers. You will typically spend up to seven times more on customer acquisition strategies than you will on customer retention strategies.
- Selling to existing customers is easier than selling to new customers. Your chances of closing a sale successfully lie between 60 and 70 percent when targeting a repeat customer. On the other hand, chances of selling to a newly acquired customer range from a mere five to 20 percent.
- Selling to existing customers is more profitable than selling to new customers. Not only do existing customers shop more often with you, but also spend roughly 33 percent more than new customers in the long run.
- Existing customers are loyal and refrain from bargain hunting. This decreases their chances of being won over by competition over pricing. Because they are less sensitive to price changes, they are also more likely to continue doing business with you even when you increase prices of certain products or services.
- Existing customers are also more likely to to try out new products or services from your company than newly-acquired customers.
- Finally, existing bring more business to you. Loyal customers double as your brand advocate and often introduce friends and family to your company (even if there is no loyalty reward at play).
It’s easy to see why that is a good thing. Referred customers come to you for zero acquisition costs and sport roughly the same level of loyalty as the contact who referred them. They are more likely to shop with you often, to spend more in each purchase, and to be less sensitive to price fluctuations.
Once you have won them over, you can quickly turn these referred customers into brand evangelists and have them refer new customers as well. Another ripple effect gets produced, although this time it is a positive one.
Customer retention can be deceptively simple
Given how massively advantageous customer retention is for your business, you would think it must be a complex process. You would be wrong! Customer retention is simpler than you think.
As you may remember, poor or negligent customer service is the number one reason why retention efforts fail. This is followed by customers feeling unsatisfied with the product/service and being wooed away by competition. Thus, if your business offerings are up to the mark, customer reten3on is all about treating customers right for most part.
And the good news is, treating customers right does not mean making no mistakes. To err is human after all, and quality customers understand that very well. This means, treating customers right is about placing them first; displaying genuine interest and compassion when attending them; admitting mistakes; and correcting mistakes or compensating for them within time.
The true value of customer retention
You know by now that customer retention is the only way your business can attain and maintain sustainable success. You know how retention is cheaper than acquisition and how repeat customers are more profitable for you. Wondering exactly how beneficial it can be for your overall business? Let’s put a number on it.
By retaining customers with exceptional customer service, nurturing the relationship, and boosting loyalty; you can see significant raise in your bottom line. A mere five percent rise in loyalty will help you raise overall profits by 25 to 95 percent!
Customer retention is an opportunity you just cannot afford to miss.
7 Mistakes You’re Making with Your Facebook Advertising Campaigns
In the world of social media sites, Facebook is the big kahuna. Sure, there are older sites – but it’s the biggest and gets the highest engagement.
Facebook advertising has been around for a while, too, and you might think you’ve got it all figured out…
Except you don’t. In fact, we’re willing to bet there are a few things that you’re doing wrong.
Do you want to start getting it right? Start by correcting these 7 mistakes.
#1: Spray and Pay
Are you doing some kind of math that says since you’re only paying for clicks, you don’t need to target your ads? Maybe you figure since people who aren’t interested aren’t going to respond to your ad, you might as well reach as wide an audience as possible.
If that sounds familiar, you’re making what could be a costly error. Ultimately, the people most likely to click on your ads are people who are in your target audience.
A far better bet is to target your ads to users who match your customer persona and do what you can to maximize your ROI. You’ll end up spending less and earning more as a result.
#2: Avoiding Video Marketing
You can’t go anywhere online without reading an article about how video marketing is the belle of the ball – the one thing everybody’s doing.
While it’s true that video gets a ton of engagement, it’s also true that on Facebook, the bulk of advertising money is not being spent on video.
In other words, video isn’t as saturated as standard ads and that means that if you make the investment in video ads, it’s likely to boost your ROI. They’re more expensive than standard ads but they can pay for themselves.
By the way, statistics back this up. A majority of consumers say they’d rather learn about a product or company from an explainer video than from written content. Why not take advantage of that?
#3: Focusing on Engagement instead of Conversions
There’s no question that Facebook advertising can be useful as a way of increasing social media engagement and building your following. And you might even assume that’s all it’s good for.
Think again. The truth is that more companies are using Facebook advertising to send traffic to their websites and encourage sales there than are using it to build engagement.
While social media engagement is important, sales and conversions are what keep your company afloat. With your next Facebook ad campaign, focus on conversions to get the biggest possible return on your investment.
#4: Assuming CPC Costs Are Increasing
Given the popularity of Facebook and the saturation of ads there, you might expect that the added competition would compel Facebook to raise its advertising rates.
You’d be wrong.
In fact, CPC ad rates on Facebook have been holding fairly steady. It’s still one of the most cost-effective and beneficial forms of advertising around.
That doesn’t mean that costs won’t go up at some point in the future. If and when they do, you’ll have to make an assessment of how Facebook advertising will fit into your marketing mix.
But for now, the low prices make Facebook advertising a must.
#5: Not Using Lead Ads
Facebook has a vested interested in keeping users on Facebook (or on the mobile app if they access the site on their smart phone or tablet.) But it’s still true that the majority of advertising money on Facebook comes from web conversion ads.
While all of Facebook’s algorithms are proprietary, you might get slightly better placement for your ad if you use a Lead ad that allows people who click to fill out a lead form without leaving Facebook.
Best of all? You can integrate Facebook advertising with your CRM to ensure that you don’t miss those leads as they come in.
#6: Boosting instead of Advertising
Since you pay for boosting posts, that’s basically the same thing as paying for an ad on Facebook, right?
We’ve lost track of how many times we’ve heard this one – and if you’re making this mistake then the chances are good you’re losing out in terms of ROI.
Here why. Facebook boosted posts are ONLY meant to increase engagement. They can bolster the reach of a particular post, ensure that all of your followers see it, and potentially earn you a few new followers, too.
That’s all well and good, but here’s what you need to remember. When you run an ad for the purpose of conversion, Facebook targets people who are likely to convert. Likewise, lead ads are targeted to people who are likely to fill out a lead form.
The purpose of the ad dictates who sees it. Decide which goals are most important to you and then tailor your Facebook advertising campaign around them.
#7: Not Using Facebook for B2B Advertising
There’s no denying that Facebook advertising is a useful tool for B2C companies, but that doesn’t mean you should ignore it if you sell B2B.
In fact, Facebook’s targeting makes it possible to target people who work in certain industries or who have a particular job title. If a company is big enough, you may even be able to target its employees specifically.
You might have to use slightly different tactics than you would for B2C marketing, such as offering an eBook or white paper as a lead magnet, but the bottom line is that Facebook advertising can be a remarkably effective lead generation tool for B2B companies.
Facebook advertising is not be new…
However, we have found that quite a few companies are still operating in the dark in terms of how best to use it. They make mistakes, fall victim to common myths and misconceptions, and ultimately, they end up losing out.
Don’t be like them. Start by avoiding these 7 mistakes to make the most of your Facebook advertising, maximize the return you get on your advertising investment, and meet your top marketing goals.
Is Social Media Automation Right for Your Business?
If you’ve read multiple articles about social media marketing, then we’re willing to bet that you’ve also seen some advice along these lines:
For the best results, have someone monitor your social media accounts all the time.
Social media automation takes most of the work out of social media marketing.
Those both sound pretty good, right? Solid advice meant to help you retain customers and make the most of your social media marketing.
There’s only one problem here. Neither one of the above statements is rooted in reality. Very few companies can afford to have someone monitor their social media 24 hours a day. Likewise, automating everything is a good way to show customers that you don’t care about them.
In other words, the truth lies somewhere in the middle. Automation can be useful, but it can’t replace genuine, human customer service.
How and when should you consider using automation? Keep reading to find out.
The Benefits of Automation
Let’s start with the good parts of social media automation. The truth is that maintaining an active social media presence is a lot of work. You’ve got to generate content, work out a schedule, post the content, and monitor messages, comments, and responses.
If your company is active on just one site, it can be hard to keep up. And if you’re on Facebook, Twitter, and Pinterest? It would be easy to turn that into a full-time job.
Automation can help you do all of the following:
- Monitor mentions of your company and industry on social media
- Recommend content for you to consider reposting to your followers
- Post content automatically according to a schedule you create
Those are all good things. They don’t interfere with the customer experience at all, and in many cases they actually make it better.
For example, automated posting of content is useful because it keeps your accounts up to date and active even if you’re swamped with work.
However, not every potential use for social media automation is a good one.
The Downsides of Automation
Now let’s talk about the things that social media automation can do – but maybe shouldn’t do.
The main thing is responding to customer messages and handling customer service.
When people contact a company for help, they expect to get it. They expect to speak to a real person who is capable of understanding their problem and solving it.
What they don’t want is an automated and potentially irrelevant response from a bot. It is nearly impossible to have an automated system respond meaningfully to customer messages.
For example, bots are only as good as the answers you preprogram into them. They can monitor for particular keywords but they can’t appreciate and interpret the nuances of human communication.
The problem with using bots is that their uses are limited. Customers don’t like it when they get canned responses.
Using bots can lead to some serious backlash if it becomes obvious that you’re doing it. Don’t believe me? Check out this ridiculous thread of comments from ASOS’ Facebook page. Once users realized that the responses were automated, they piled on – and the end result was that ASOS came out looking like they didn’t care about their customers at all.
To Automate… or Not to Automate?
As you might expect, then, the choice comes down to whether or not to automate – and if you do automate, which automation features to use.
The best way to decide is to put yourself in your customers’ shoes. The point of using social media is to connect with your audience and enhance their experience of being your customer.
What does that mean for your automation decisions?
Every choice you make about automaton should be based on the customer experience. Will setting up a regular posting schedule and automating posts enhance their experience? The chances are good that the answer is yes.
Automated posting of content means that:
- Customers know when to expect your posts and will look for them
- Your account doesn’t appear to be inactive even if you’re on vacation or swamped with work
- Followers have a steady stream of content to enjoy
Those are all good things, clearly, and they offer real value to your customers.
The same thing could be said of monitoring mentions, which can help you connect with social media followers and let them know that their mentions of you are appreciated.
However, the rubric of customer experience falls apart when it comes to automated customer service mentions. The one upside is that it ensures that people who write on social media get an immediate response – but that’s where the benefits end.
- Customers get boilerplate responses that may not address the issue they raised
- They may feel that you do not care about their satisfaction
- Automated messages from bots can make your company look callous or ridiculous
Does that mean that all message automation is a bad idea? Of course not. In fact, there is one way you can use it to your advantage.
Program one – and only one – response into your automation. It might say something like this:
Thank you for reaching out to us. Your happiness and satisfaction are important to us. We can’t monitor Facebook 24 hours a day, but we promise that a real live human will get back to you with a response as soon as possible.
Your Company Name
The benefit of this approach is that the customer gets the satisfaction of an acknowledgement without having to cope with an impersonal response. There’s a real warmth to this response, which acknowledges the difficulty of providing 24 hour customer service.
As long as you keep the promise you make in a message like this, you can use automation to let customers know that you care.
Your customers are smart…
And your use of automation should be too. As long as you make creating a stellar experience for customers your top priority, then you can use automation to make your life – and theirs – easier.
Use These 3 Things to Help Make Your Customer Referral Program a Success
Get any group of marketers together and ask them what they think about customer referral programs. The chances are extremely good that you’ll hear a universal chorus of approval.
What’s not to love about customer referrals? They’re a free way to generate leads. Even if you offer an incentive for referrals, you’ll probably end up paying less for them than you would for advertising.
There’s a reason that so many companies offer referral programs…
But what you may not know is that most of them are actually failures.
That might surprise you, but it shouldn’t.
Referral programs fail because companies just set them up without thinking about them. They don’t consider the three big questions:
- What makes customers refer their friends and acquaintances to a company?
- What are the benefits customers receive from your products?
- When and how should you promote your referral program?
If you’re shaking your head and realizing that you’ve made this mistake too, don’t worry. We’re here to help you figure out how to make your referral program a big success.
Why Do Referrals Happen?
Let’s start with question number one: What makes a customer want to refer a friend to a particular company?
That’s a big question and an important one. If you don’t understand it, you might just end up spinning your wheels with a referral program that appeals to nobody.
According to Jonah Berger, who wrote a book called Contagious: Why Things Catch On, there are six potential factors that might make your customers want to give you a referral:
- Social currency comes first. Will a referral make your customer look good on their own or in comparison to other people?
- Emotions play a big role in decision making. If your referral program engages customers’ emotions, they’ll be more likely to refer.
- Virality is up next. When an idea or concept is easy to remember, it’s also more likely to spread. That’s just as true of referrals as it is of cat videos.
- Stories are important to people. If your referral request comes disguised as a story, then it’s more likely that people will want to share it.
- Practicality is really at the core of referrals. Is your product practical? Is the incentive to refer it practical too?
- Publicity is the final factor. People tend to follow what others do, but only if they can see that they’re doing it.
The good news is that you don’t have to engage all six of these factors to make your referral program a success. You just need to use the ones that make sense in the best possible way to inspire referrals from your existing customers.
How can you optimize the “why” of your referral program? The key is making it clear that your product aligns with your customers’ core concerns, beliefs, and values.
For example, Apple sells its products by talking about their desire to challenge the status quo. They encourage their customers to think of themselves in a certain way that tells a story and taps into their emotions.
Keep in mind that this aspect isn’t about what you offer in return for a referral – although it’s a good idea if you can connect it to those same values.
What Benefits Does Your Product Provide?
Next, let’s talk about the benefits that existing customers can gain if they refer their friends to you.
This question relates most closely to the issues of practicality and social currency. If someone is going to give you a referral, they want to know:
- Will it make me look good?
- Will it help my friend?
- What’s in it for me?
To understand how this might work, let’s look at an example.
Cloud storage company Dropbox increased their sign-up rate by 60% in 2010 by using a simple referral proposition that hit all three of these points perfectly.
The specific offer was that for every friend who signed up for Dropbox, the customer making the referral would receive 500 MB of free storage – and so would their friend. They placed of 16 GB on the referral program.
This offer makes the referrer look good because they’re offering their friend a practical and valuable solution for cloud storage along with a freebie. The benefits to their friends are obvious – and then the person making the referral gets a freebie too.
Think about what you can do to highlight the practical benefits of participating in your referral program. The more obvious they are, the easier it will be for people to make the leap and take part.
When and How Should You Promote Your Referral Program?
The last step is knowing when and how to promote your referral program. Where do you advertise it?
The key is making sure that your customers see it (there’s no point in showing it to non-customers) at the time when they are most likely to take action.
A lot of companies make the mistake of putting information about their referral program in the footer of their website or on their home page.
That does nothing to speak to the emotions of your customers, or to trigger them to take part.
Instead, a better bet is to consider the best way to reach out directly to your customers when they are at their most emotional – and most likely to be enamored of the practicality and value of your products.
In case you were wondering, that’s right after they make a purchase!
The best way to get it to them is to use an email autoresponder. Most customers expect to see a follow-up email after they make an online purchase, and it’s the perfect opportunity for you to outline the benefits of your referral program.
If you want referrals to pour in like rain…
Don’t just dump your referral program in some out of the way corner of your home page.
Instead, make it clear why people should give you referrals and what they (and their friends) can gain from doing so.
Then, hit them with the information about it at exactly the same time – and sit back and collect the referrals that result.
What Motivates People to Buy?
Every business owner wants to know the answer to this question. After all, if you know how to motivate people to buy, then you should have no trouble boosting your sales, which is the ultimate goal.
Once upon a time, the golden rule was give people what they need, because that is what they will spend their money on. While that may well have been the case a few decades ago, things are a little bit different now.
Statistics show that in today’s media driven society people are actually spending more money on the things that they want like, smart TV’s, High Tech Electronics and leisure activities than they are on the necessities like food and shelter!
That’s why it only stands to reason if you have a product or service to sell you need to present it to your prospects as something they want. Focus on what is in it for them, stress the benefits and make them feel like it is something they absolutely must have. Make them feel like they can’t live without it.
People buy because they get pleasure from their purchase. They don’t walk into a car dealership and buy the latest model because they need it they do it because it makes them feel good to drive it.
Whether it is the comfort of the plush leather seats, the power windows, or the symbol of status, they just love driving their new car! Whatever their reason, you can rest assured that their decision was based on want, not need.
Want isn’t the only thing that motivates people to make a purchase. While it is the leading factor, many other triggers can motivate them to whip out their wallets. For instance, if you can connect your product or service to consumers in a way that can helps them:
- Save or make more money
- Save more time
- Be more comfortable
- Be happier and healthier
- Be more popular
- Increase their enjoyment
- Attract the opposite sex
- Escape pain and sadness
- Avoid trouble
- Make life easier
Or take advantage of opportunities that will benefit them in a positive way then you can motivate them to take action. Once you find out what they want and present your product or service to the in a way that makes them feel like they can’t live without it, you should have no trouble boosting sales for your business.
If you shop online or if you’ve ever made a purchase from a website like Amazon then chances are testimonials probably played a big part in your decision-making process.
Customer testimonials have the power to boost your sales substantially and they do it without spending and extra money on advertising. They are excellent emotional triggers. A glowing recommendation from happy customer can create a level of trust and provide potential customers with the ability to imagine what it would be like to purchase your products or services.
Typically, when someone begins shopping for a new product and service, one of the first things they take into consideration is the recommendation of others. They seek advice from family, friends, and testimonials of complete strangers. They do this because they want to make an informed choice.
Testimonials give them insight into how other people feel about the product or service as well as a good idea of what can do for them. So, do not underestimate the impact they can have on your business.
Online Marketing Assistance – Can Your Business Afford to be Without it?
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