When at a critical point of growth, it can be easy to overlook how far your business has already come. In fact, one of the most powerful resources for future growth may already be within your grasp: current customers.
Just how much more impactful can you be on your bottom line by focusing on existing customers rather than new ones? According to the classic 1990 Bain & Company and Harvard Business School case study, profits can increase by 25 to 95 percent when customer retention increases by just 5 percent.
As entrepreneur Gary Vaynerchuk said in an interview with TechCrunch, “The battlefield [of customers] is going to be retention and lifetime value.” Why has the focus on current customers prevailed? Because it can be a proven, low-cost growth strategy. And most of your competitors may not be doing it.
Here's how you can help leverage your existing customers for long-term revenue growth.
Build Customer Engagement
Beginning to engage your customers can be easier than you think—and it can have huge benefits. Customers who engage with a company or brand or other customers online, such as through forums, social media or other programs, may be higher value customers. In fact, customers who engage online spend more money and can increase revenue by 25 percent.
Of course, online community platforms aren't always the best fit for every business. Other options include customer newsletters, blog and educational content, or even events and sponsorships of other relevant events.
Invest in Customer Service
With the ability to amplify any complaint across social media, the reputational costs of poor customer service in this social era can be clear. Today’s customers often expect a responsive and high-quality customer service experience that not only resolves their concern but also leaves them smiling. Here are some considerations to provide that type of experience:
- What kind of customer service is required? If the service or product your company provides is time-sensitive or is critical in nature, you may consider 24/7 call lines.
- How much budget can be allocated toward customer service? If budget is a concern, a simple FAQ or online, self-serve support platform may suffice.
- How easy is it for customers to contact support and find the right contact information? This information should be easy to find on your website, purchase orders, receipts and/or social media.
- Is the customer service experience a good one? No one likes to be waiting on hold for 20 minutes or to be passed from service agent to service agent in pursuit of the right department.
Also give thought to which customer service complaints can be resolved upfront. Is there a particular part of the checkout process during which buyers get stuck? Is one of your products frequently returned because of malfunction? Sometimes, the most effective customer service strategy can be to invest more upfront in user experience and product development.
Leverage Feedback for Insights
As Bill Gates said, “Your most unhappy customers are your greatest source of learning.” Every customer who reaches out for customer service can be someone to learn from:
- What are the pain points?
- Which of these pain points has your product or service is not addressed?
- How else can you provide value?
The answer to any of these questions could be a new revenue opportunity.
However, it’s not just unhappy customers who you can learn from. You can learn from your most satisfied and enthusiastic customers, too. For example, Lego created an ambassador program that allowed company leadership insight into how its products were used and modified. In turn, this gave passionate Lego fans the opportunity to influence business decisions for new products while showing off their best inventions.
Remarket to Current Customers
Customers may love to know that they are known. You may be able to track which of your products and services each of your customers have already purchased. This data can be used to position marketing for new purchases that are either complementary or of a similar category. For example, for e-commerce, you could send all customers who bought a red purse marketing emails that feature the matching red wallet and accessories. Or, for SaaS, you could provide all customers who previously bought accounting software a discount on a new add-on package. The options can be endless.
Recommendations by friends and family can be one influence for purchases. However, outside of having such an fantastic experience that they can’t help themselves, customers rarely share without being prompted. When asking customers to share, you should consider providing a substantial return, such as a discount or free access for a period of time. What exactly that referral reward is will be unique to each company.
More than anything, however, the key to leveraging customers over the long term is to be a good company that does right by its customers.
Read more articles on customer engagement.