Is relationship marketing a key element in your marketing strategy? If not, it's time to re-evaluate on how you spend your marketing budget. Businesses typically spend 80% of their marketing dollars on the pursuit of new customers in an attempt to gain new business, yet this generally does not result in an 80% increase in sales.
Building existing customer relationships and expanding customer retention is an important strategic aspect to consider. A new and growing business needs to constantly capture new consumers to grow its customer base, but it's also important not to lose sight of your existing customers, even if they purchased from you only one time.
Why Does a Customer Defect?
There are several reasons why customers may decide to leave you and go to a competitor, but the ones heard most often are:
- They felt your pricing was too high or unfair
- They had an unresolved complaint
- They took a competitors offer
- They left because they felt you didn't care
The last two reasons in this list make up the majority of lost customers, which can be a difficult realization, but one that can be turned around. Business by nature is competitive. You may not always be able to meet or beat the prices of larger companies who can purchase in larger quantities, but you can prevent a customer from defecting because they feel unimportant.
How to Retain your Customer Base
There are several ways to achieve the goal of retaining your customers and making them feel their business matters. The main focus here is building those relationships and finding ways to connect with your customers. Learn about their needs and what they're looking for when they make an online purchase. Determine how to meet those needs and let your customers know that you value them.
In a seemingly endless world of online business, it is easy for a customer to feel like a number and that he does not matter. Nothing could be further from the truth, and you need to make sure your customer knows this. If one feels ignored and switches to a competitor, not only do you lose their business, but you also risk the potential of unhappy word-of-mouth discussions.
Customers often feel an affinity for the "little guy" in business, the "underdog" so to speak. People routinely pay more for the same item at a mom & pop store than at a big conglomerate. This happens for a variety of reasons, but primarily because of the relationship they build with the owners. For the customer this relationship creates a feeling that they matter, and that the owners are happy to see them when they walk through the door.
The same holds true in Internet marketing. It is a slightly more complicated avenue, but the sentiment remains the same. People like to feel noticed, and that their business is important. If you can create relationships with your customers that make them feel this way, you are well on the road to customer retention and a solid customer base.
