Calendar year end is typically a time when most businesses start to think of their appreciation efforts. Afterall, Thanksgiving is an obvious time to reflect on and express gratitude to those who support your business. And the December holidays are a time of traditional giving, so it’s easy to feel the pressure of falling in line with this typical relationship building opportunity. What most businesses overlook is the remaining 10 months that provide equal, if not greater opportunity to strengthen customer relationships.
While you’re working on your goals for the new year, now is a great time to consider improving your relationship marketing efforts by being a bit more intentional. Let’s look at some of the reasons that it’s critical that you have a plan for consistent relationship building.
You’re Losing Up to 20% of Your Customers
We’ve said it before, but it’s worth repeating – Every year, the average business loses up to 20% of their customer database. Why? Because they’ve done nothing to connect with their customers throughout the year. Maybe they’re too busy trying to grow the business with new customers. Or maybe they aren’t sure how to connect with existing customers. Either way, customers are quietly finding new brands and leaving yours.
If you add your new customers to your Customer Relationship Management System (CRM) and do nothing more, you’re likely going to lose that customer after about a year. And you probably have no idea how many customers currently in your database fall into this “lost customer” category. You’re not alone, and there is a way to find and re-engage those “lost customers!”
Customers are satisfied but not engaged
The next thing you need to understand is purchase satisfaction vs brand engagement and overall loyalty. Your customers probably like what they’ve purchased from you. As a respected business, you’ve probably delivered your product or service to their overall satisfaction. But that doesn’t mean they feel they have enough engagement with your brand to stick around or owe you loyalty.
In fact, a poll of Gallup’s customer database found that 50% were satisfied with a given brand, but only 38% were engaged with one. Source: https://referralrock.com/blog/relationship-marketing/
Customers have plenty of options to capture their attention and lure them elsewhere. Keep the relationship strong with frequent, intentional touch points throughout the entire year to stay top of mind.
New long-term relationships cost more
Finally, most statistics will tell you that it costs up to 5-7 times more to close a new customer than it does to retain the ones you have. But did you also know that building a long-term relationship with that new customer will cost you up to 16 times more? Crazy! Source: https://www.annexcloud.com/blog/21-surprising-customer-retention-statistics-2018/
So, shouldn’t it make sense that a portion of your marketing efforts should be focused on building better relationships with your existing database?
New Year, New Focus on Relationship Marketing
As we move into the new year, now is the perfect time to address the ratio of your marketing spend that you’re going to designate toward building long-term loyalty with your existing database. And you certainly shouldn’t try to tackle the entire database at once. Below are a few ways to breakdown your approach that will make this effort more manageable.
With your existing customer database:
1) Find the customers who have already spent the most with you, but you haven’t heard from them in over 6 months.
2) Find all the customers who you haven’t heard from in the last year.
3) Find all the contacts who haven’t purchased since your latest new product/service was launched.
4) Contacts who haven’t taken any action yet.
Now, the question is, how could you re-engage with these people in a more personal way. How could you remind them of the experience they had with your brand and make them want to feel that again? Is there something physical that you can send to surprise them? Light the fire and make them feel excited to reconnect with you!
Once you know the what and the who, now you simply need to break your list into a number that you can reasonably manage to execute on a monthly basis. And this will be your retention game plan for 2020!
Not sure what experience will re-engage your list? That’s the fun part! Feel free to connect with our Customer Experience Team at info@TheExpressory.com and we’ll be happy to work with you to define something that feels right.