April 28, 2022

Customers for Life: Proven Strategies for Repeat Business

by The Ottimate Editorial Team

Customer acquisition, lead generation, and retention. Which has the biggest impact on your bottom line? While each is essential, only one will bring you consistent, continued success: customer retention. According to the US CallMiner Churn Index of 2020, vendors lose over $168 billion for failing to implement strategies that retain customers. How do you tackle this challenge, increase your customer retention, and build a loyal customer base? 

Customer Retention 101

Customer retention involves all the activities your business performs to keep your customers coming back and prevent them from switching to your competitors.

Unlike lead generation or customer acquisition, retention turns your focus on existing customers and people who’ve purchased your product or service at least once.

Retaining customers isn’t just about the bottom line or revenue you generate from them. Instead, it’s about your ability to create lasting relationships with them. Your customers want to draw as much value from you as you draw from them, and they’re willing to stay if you invite them.

Consider this: You’re more likely to sell your products to a repeat customer than a new customer. Once they learn the value of your product or services, they keep coming back for more.

In other words, customer loyalty is the key to long-term business success. 

But there’s more.

Why Customer Retention Is Important

Customer retention has some massive benefits for your business.

  • It’s an affordable way to grow your business. It generally costs much more to acquire new customers than retain them. While customer acquisition has its place in your business, why not satisfy the needs of your current customer base first?
  • Focusing on customer retention increases your ROI. Did you know that focusing on customer retention by just 5% can increase your ROI between 25-95%?
  • Customers you retain with your excellent service and terrific products will recommend you to others. That’s free marketing, which also increases your organic conversions from referrals.
  • Customer retention strategies help you build trust and loyalty in your brand. That way, your customer will always choose you for their next purchase — not your competitors.

The Difference Between Repeat Customers and Loyal Customers

Just because some people buy your product or services often doesn’t mean they’re loyal customers. There are repeat patrons too. It’s easy to convert repeat customers into loyal supporters, but there are subtle differences between the two. Let’s explore some:

  • Repeat customers will often jump ship when presented with options or when your business faces challenges. Loyal customers will buy from you regardless. 
  • Loyal customers are your biggest fans and will talk about your product or service to family, friends, and colleagues. Most returning customers won’t share your posts on social networks.
  • Repeat customers will give feedback, but not as deeply or as detailed as loyal customers. A loyal customer will go the extra mile to suggest changes and improvements, then pay premiums to enjoy the new product.

Once you understand the difference between the two, you can take appropriate action. So how do you do that?

How To Keep Customers Coming Back

  1. Establish a strong brand and reputation
  2. Provide the best customer experience possible
  3. Create a community your customers can be part of
  4. Keep communication lines open for all of your customers
  5. Reward your customers for coming back with loyalty programs
  6. Be easy to do business with
Happy business owner enjoys keeping loyal customer coming back. 

1. Establish a Strong Brand and Reputation

Strong brand values and a stellar reputation for quality are the backbones of customer retention. Your vendor systems will reflect your values and endear you to your customers.

They should feel like they’re dealing with human beings behind your brand, rather than a corporate engine designed to pump out profits.

Create a brand voice and identity that appeals to your ideal customer. Let your communication sound like a conversation, and keep your details engaging and relevant.

Build a reputation for understanding your customers’ needs. Deliver the highest quality service or product to meet their pain points.

2. Provide the Best Customer Experience Possible

Give your buyers an experience that will have them coming back for more. From the moment they visit your business to when they leave, make their experience memorable.

Nothing attracts a customer more than enhancing their experience at your business. One way you can do this is to automate payment collections from your customers. That way, they don’t have to go through the hassle of manually paying you for each bill.

Another way to enhance your customer experience is to offer touch-free payments. Help your customers schedule payments and pay you online, so they won’t have to send you paper checks

That’s not all. If you have a blog, create engaging content that entertains and educates your readers. If you’re a hotel, give your customer a VIP experience. Listen to your customers’ feedback and address their issues promptly.

Besides that, deliver high-quality products and subscriptions to your customers. That way, they enjoy receiving your deliveries and doing repeat business with you.

3. Create a Community Your Customers Can Be Part Of

Many like to join communities to stay updated with products, upgrades, extras, and other features. Communities are also an excellent way to connect people with your business and show them you’re paying attention.

Clients often ask questions, raise concerns, or request repairs, replacements, and unique features. Your community of customers can be pretty helpful there. Advanced users can help newer customers around your products. You can also respond directly to comments, posts, and media your buyers share.

As word spreads across networks about your ability to engage with your customer community, they’ll increase in number, and so will your customer retention rate.

Handshake between customer and business owner showing why ease of doing business is how to keep customers coming back.‍

4. Keep Communication Lines Open for All of Your Customers

Make it easy for your buyers to contact you at any time on any channel. Not only through phone or email, but also social media channels like Facebook, Twitter, Instagram, and Reddit. Keep these interactions honest, lively, and personal. You can also use email newsletters.

To enhance the experience further, use customer relationship management (CRM) software. They empower customers to switch between platforms and still receive stellar customer service.

A 2021 Zendesk Trends report shows that 50% of high-performing companies use multiple communication channels to connect with their customers. Only 18% of lower-performing peers had numerous communication channels. That shows how powerful a multichannel strategy can be.

Keep all of your business lines open. Ensure your customer service team has all the necessary tools to address customer accounts or product problems.

Ensure that your staff delivers excellent customer service that solves your buyers’ needs. If not, elevate the conversation until someone more advanced addresses it. Follow up on customer complaints and resolve them in record time.

5. Reward Your Customers for Coming Back With Loyalty Programs

Among the most potent tools you can use to retain a customer are rewards for loyalty — also known as loyalty programs. Your buyers enjoy receiving small incentives that enhance their buying experience from your vendor business. These include:

With these rewards, clients and customers benefit directly from buying from you.

6. Be Easy To Do Business With

No matter how clever your customer retention strategy is, simply being easy to do business with makes all the difference. Make it easy for your customers to pay bills and settle their invoices. This will simplify your workflow, as well!

Text on white background: "It's been a lot easier. We don't have to coordinate our schedules so much. I can do a bulk of the payments, she can do others, and then we just meet for five minutes to do the rest. It’s been nice." - Sarah Young, AP and Inventory Specialist for Tatsu-Ya

Here are some ways that vendors can be easier to work with:

  • Offer early payment discounts as rewards for paying invoices early.
  • Offer Web Electronic Data Interchange (Web EDI) functionality that enables you to exchange critical business documents and files with your customers and partners.
  • Empower your customers and vendors to use online and cloud accounts to access their bills and invoices.
  • Support and accept digital payment methods and virtual cards.
  • Offer cashback on bill payments and invoices that are paid on time and on cards you’ve issued to your customers and vendors.

Final Thoughts: How To Keep Customers Coming Back to Your Business

Creating a customer for life is a massive business strategy for vendors looking to grow in the long term. Customer retention is much more affordable and valuable than acquisition — but only if you apply the right techniques in your business strategy. 

Want to earn cash back on all your invoice payments? Join Ottimate’s VendorPay Network today and pay any of our 180,000 vendors from one single platform.

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