August 11, 2020

The Strain to Retain: 5 Pitfalls of Ignoring Your Customers

When most people think of marketing, they usually think of appealing to new customers. Marketing isn’t usually associated with reaching out and messaging existing customers — only 18 percent of brands said that the main focus of their marketing efforts is customer retention (as opposed to customer acquisition).

Nevertheless, messaging for your existing clients is just as important, if not more important, as messaging for new clients. If you want to see continuous growth, you must reach out to your community. Today, we will be exploring the top pitfalls of brands who forget to message for their community.

1. Losing Customers by not Messaging

If you’re in the 82 percent of businesses that don’t make customer retention the main focus of their marketing efforts, you run the risk of lower profits.

Increasing your retention rate by just five percent can increase your profits by up to 95 percent. On average, company value is increased by 30 percent with just a 10 percent increase in customer retention.

Not focusing on customer retention will be more taxing on your advertising budget in the long run. This is because acquiring new customers costs 5x more than retaining existing ones — and even when you have acquired a new customer, it costs 16x more to bring them up to the level of existing, loyal customers.

Messaging for your clients and letting them know that you are there for them will decrease your churn rate. It will increase loyalty; when your clients trust you, they will be more likely to stick around.

2. Lowering Your Average Customer LTV

Messaging for your clients is about more than just getting them to stick around. You can increase your average customer lifetime value by carefully crafting a brand message that speaks to them, reassures them, and shows them how you are improving and catering to their needs.

Focusing on increasing your customer LTV shows that you are thinking ahead; focusing only on acquiring new leads is a shortsighted strategy.

Did you know that the average repeat customer spends 67 percent more in months 31-36 than in months 0-6? Messaging for your existing clients is a process of increasing trust and slowly strengthening your relationship over time. It pays out in the long run. It’s not a one-time hack; it’s a lifestyle, so to speak. This has to be who you are as a brand, not some tactic that you are trying out in an effort to increase sales quickly.

When customers trust you, they will buy additional products that you sell, whether that is an upgraded subscription, an add-on, or an entirely new service. The probability of selling to an existing customer is 60-70 percent, compared to just 5-20 percent for new customers.

3. Losing Out on WOM Sales

When customers are satisfied with your services and trust you as a brand, they will recommend you to family, friends, and business associates. Word-of-mouth is often overlooked in the age of digital marketing, but it is still important. It is the primary factor behind 20-50 percent of all purchases.

Word-of-mouth extends beyond the physical into the digital. Forty-three percent of people are likely to purchase a product after learning about it on social media. Ninety-two percent of customers trust recommendations from family and friends above all advertising, and 84 percent of consumers trust online reviews as much as recommendations from family and friends.

By messaging for your existing clients on public platforms, such as your blog and social profiles, you will increase social proof. Prospective clients will see how you interact and care for your clients; you will be able to get reviews and online mentions, which will boost your authority.

4. Not Meeting Unrealistic Expectations

This is something that many businesses and brands overlook. If you don’t message for your existing clients, how can you manage their expectations? How can they know what you are capable of, what kinds of services you offer, and what they should expect from you?

Messaging for your clients starts from the very beginning. They should know what you can do and what is above your capabilities. Unmet expectations lead to negative reviews and feelings of being let down; dissatisfaction leads to a higher churn rate. Open communication shows clients that you are doing exactly what you promised to do, and they will appreciate you for that.

5. Not Improving Customer Service

When businesses don’t pay attention to their existing clients, they often forget about providing quality customer service. Sixty-eight percent of customers will leave if they feel you are indifferent to them. If you don’t provide quality customer service, you are bound to lose customers to your competitors; 66 percent of customers said they switched brands because of poor customer service.

Quality customer care focuses more on just fixing problems when they arise; it involves forecasting problems in advance and providing solutions so that customers don’t experience those problems. This ties into the next point — by messaging for your clients, you can anticipate problems in advance.

6. Not Getting Feedback

An important part of your communicating with your existing clients is collecting feedback so you can improve your services. Messaging for your clients isn’t just about selling stuff. It’s about keeping the lines of communication open both ways. Be there for them; listen to them.

Demonstrate that you want to improve, that you’ll go above and beyond your call of duty to meet their needs. Ask them for feedback so you can learn. Be humble. No business is perfect, and if you don’t message for your clients, you will miss out on the amazing opportunity to improve your service and emerge as a leader in the market.

Wrapping It Up

Proposo focuses on getting the most out of your existing pipeline. This includes leads already in your funnel and existing clients. For existing clients, your strategy should revolve around two main points: Reassurance and Expansion.

Reassure your customers that you are there for them in times of crisis and in normal times. Expand your capabilities and increase accessibility to help your clients and improve their results.

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Dan is an expert in global technology brand marketing and sales. He has advised IBM, Google, LinkedIn, Microsoft, Samsung and Cisco on brand position, go-to-market strategy and sales performance. He has launched businesses in Fintech, Cleantech, SaaS and marketing platforms. Dan is an award-winning tech journalist who wrote for the Financial Times and Economist Group.

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