How to Create Return Customers
Updated: Jul 12
Fact: the single most expensive thing you will do in your business is acquiring a new customer. Your CAC (or customer acquisition cost) is one of the most critical numbers in your business and can affect your bottom line.
It takes significantly less money to keep existing customers and nurture a good relationship than acquiring new customers. So, how do you keep your customer retention rate high? Traditionally, the buyer's journey cycles through awareness, research, purchase, experience, retention, and word of mouth. What the buyer's journey is not doing is connecting back to awareness. Here at DesktopShipper, we prefer to follow a customer loyalty lifestyle originated by Noah Flemming.
Flemming speaks to how customer loyalty is not an easily definable definition. It is more about evoking emotions and associating your company/product/service/brand with a good memory.
What is the Customer Loyalty Lifestyle?
Imagination before persuasion
Conversion NOT coercion
Happily Ever After
Step One: Imagination before Persuasion
Flemming defines step one as "understanding how our actions align with how the customer is feeling and how they're making decisions." Thinking back to our CAC, how are you first acquiring customers? Customer acquisition and retention are all about memories and emotional association. Putting an image in a customer's mind associated with your brand is the best way to do that.
Consumers want to find a genuine reason to connect to a company. The company's story can be as simple as, "I had this problem, and I made a product that solved the problem." The idea is to humanize the consumer's view of the brand and give them a reason to associate with the product and your company. Don't try to persuade the customer to connect with your company; tell your authentic story.
5 Tips to help consumers imagine themselves with your product:
Tell an honest story. "Share your why."
Use customer testimonials (use their names and faces be specific)
Share parts of your product or service for free
Don't over-promise and underdeliver
Step Two: Conversion, not Coercion
This step (and honestly, all steps) are about the small details. Conversion is the step at which a possible customer makes a decision, based on their research of your brand, to make a purchase, even if they aren't entirely sold on the brand yet. Keeping the buying experience truthful to your brand helps achieve conversion. If your brand's goal is to evoke happiness, the box you ship your orders should also represent happiness! Ensure you have consistent branding throughout the experience.
Don'ts in this step:
Make this part of the experience frustrating for the customer
Try to make the quick sale
Do's in this step:
Provide consistent and seamless sale or delivery of the product
Provide value and a memorable experience
Remember, conversion works from top to bottom. It includes everything from the messaging on your website to the customer service representatives, all the way to the company's choice in CEO. Understanding how all these pieces connect as a whole is why it's essential to ensure that whoever comes in contact with your company at the point of sale (POS) is getting consistent messaging. It is not about closing the deal with gimmicky tactics; it's about being authentic and continuing to build consumer trust.
Step Three: Experience Choreography
Experience choreography is about the actual delivery of the product or service. The "ending" to the buyer's journey is often the delivery process, but Flemming challenges businesses to try to look at it as somewhere in the middle. Take a moment to ask yourself: does the item or service delivery experience leave the customer wanting more? Delivery is where companies dance around building a lasting relationship with their buyer. Remember: an unsatisfactory ending can ruin even a great experience.
How to Stop Bad Endings:
Map out the first 90 days of going from prospect to client
Create remarkable and memorable moments
Don't ever forget the little things
Secret shop your business
All of these steps are to ensure a seamless experience for your consumer. Find the broken links and fix them to ensure that your customer retention rates are high and your cost to keep the customers coming back is low.
Step Four: Happily Ever After
The Happily Ever After step is where you, as the company, continue to communicate with the customer after the transaction has officially ended.
3 questions you should be asking your company:
How soon after the transaction ends are you making the next contact with the customer?
What are you saying that is useful and valuable? (if you don't have anything useful to say, should you say anything at all?)
Is this communication to sales or gimmicky?
This step aims to make the most of your customer communication services, add value, and enhance your customers' lives. Follow what Flemming refers to as MMP: meaningful, memorable, and personal.
Bonus Tips to Boost Customer Retention:
Customer Loyalty Program
There are plenty of ways to build a loyalty program. The number one thing to remember is to try to make sure it's not stale. You are trying to get customers to feel the need or desire to return. When the program becomes old, how will your company create new memories and feelings between your company and your clients? Follow through on your loyalty program as well. When you promise something to a client, deliver.
Customer Relationship Management software or CRM software is a tool used to understand your clients. You cannot serve your clients in a meaningful way if you are not sure who they are. Your company needs a CRM, and they need to use it. When you can segment your different target markets and specify each segment's needs, it means you are nurturing the relationship.
Online and In-store Connections
Companies that make things easy and helpful are those that seamlessly use their e-commerce sites. When a customer has to understand different messaging from one part of the company to another, lines get crossed. Remember, you want to make the shopping experience not only a great one but also a painless one. Not many customers will stick with a company that makes their lives harder.
Connections are supposed to be a loop, not a straight pathway. When step 4 stops, then you move right back to step one when they repeat their purchases. A system such as this does take a lot of time and energy to set up, but once you have segmented and understood your customers, it will help keep you on track.