The holiday season 2020 is around the corner and it is predicted that 92% of people will shop online this holiday season. With customer retention is a primary goal of any business, this is the best time of the year when you can connect and create a bond with your customers.
Invest in these business strategies for optimum results during holiday season 2020
Where Should You Focus Your Energy?
Should you be focusing more on gaining or retaining customers? It depends on where you are in the business life cycle. Gaining a clear understanding of this cycle will help you to clarify your needs.
- Just Starting Out: As your business is getting established, your focus should be on getting customers and growing your customer base. Create strategies for getting the word out and inviting customers to find out about your products and mission.
- Early Growth: During the initial phase of rapid growth, you should continue to develop your customer base while starting to interweave retention elements into your business plan.
- Well-Established: Have a healthy balance between acquisition and retention. Develop loyalty programs that encourage your established customers to refer other customers. At this point in the cycle, the main focus is on retention and referrals.
Understanding where your brand falls in the life cycle helps you to target strategies that will clarify and strengthen your business objectives.
How Should You Apply Business Metrics for Success?
Know how to measure what is happening within your business to identify strengths and needs for improvement. By understanding the repeat customer rate, you will master the backbone of customer retention. Calculate this customer rate in the following ways:
- Measure your repeat purchase rate. This is accomplished by calculating the number of customers with more than one purchase versus the number of unique customers within a specific period. Divide the number of repeat customers by the number of unique customers to find the repeat purchase rate.
- Find your purchase frequency. Evaluate how frequently customers are coming back. Repeat customers are responsible for up to forty percent of the average store’s annual revenue. Therefore, it is essential to know how often your customers are returning. Calculate your company’s purchase frequency by considering a specific time frame and dividing the total number of sales by the number of unique customers.
- Establish your average order value. This term refers to the amount of money a customer spends at your store during each transaction. This is found by calculating the total revenue earned and dividing this total by the number of orders placed.
The main goal of business metrics is to increase customer value. Customer value is established by multiplying the purchase frequency by the average order value. Knowledge of these numbers will give you the power and freedom to invest wisely in your business expenditures and resources.
How Can You Maximize Customer Accounts?
Once you identify where your business is in its life cycle and educate yourself on the use of business metrics, you are ready to make wise decisions about investments in customer accounts. Consider these strategies for maximizing your customer accounts:
- Offer to set up an account after the first transaction. This is a prime time to gain vital information for ongoing contact.
- Provide a means of communication and a method to quickly get a resolution for issues or disputes. This allows problems to be diffused before any frustrations set in. It also allows an opportunity to receive customer feedback. Fast, friendly and consistent customer service is the gold standard.
- Consider sending a personalized, handwritten thank you note whenever possible and a small gift when appropriate. Both gestures offer an element of surprise and delight. It also allows for reciprocity, which allows one positive action with another positive action.
- Send engaging emails to customers. Email marketing is the foundation of customer engagement and a central part of your retention toolkit. Each email must add unique value. If not, they appear insincere and begin to achieve the status of junk mail. Fine-tune the timing, relevance and unique message. For example, estimate when the product will likely be used up or need to be refreshed.
- Develop a customer loyalty program. Loyalty programs are a profitable exchange for both the business and the customer. Clientele feels valued and appreciated and serves to establish and stabilize your business. Use discounting sparingly and appropriately. Avoid setting your customers up to always look for discounts. Instead, consider giving credits toward the purchase price.
- Invest in video marketing as an excellent strategy for allowing your customers to meet you and your staff and to understand the energy and mission of your brand. This will allow your client to identify with you.
Your current customer base is the best asset your store has. Customers know the brand, products and appreciate your service. Understand these tools of retention to grow your business through your valuable, long-term clients.