Monday, October 10, 2016

5 ways to keep your customers coming back for more

By Mike Polner, head of Product Marketing, FiveStars - Oct. 3, 2016 

Businesses looking to grow their customer base are failing to capture one key group: customers who come in once and never again, which is one out of two consumers, according to our research.

Considering that it is 10 times more expensive to get a new customer than to keep an old one, it makes sense for businesses to woo previous customers. Increasing retention 5 percent can increase profit up to 95 percent, according to Harvard Business Review, so here are five ways to increase that rate.

1. Incentivize customers and build a robust customer database. Offering rewards is the easiest way because it's a strong incentive. We recommend offering spend-based rewards vs. simple point-per-dollar rewards, this encourages customers to actually spend more, not just visit more. There's a reason Starbucks switched! 

2. Deliver great customer experiences. Keep your customers happy by helping personalize their transactions and their experience. Understand what they like to order and if they're a new customer or a VIP and recommend items to them accordingly. We see that businesses that score a 10 vs. a 9 in customer experience increase revenue by 26%+

3.Keep your first-time customers hooked. About 60 percent of customers that come once, never return. Bring them back by incentivizing a return. Once a customer returns for a second time, they're 40 percent more likely to return again. 

4. Leverage your best customers to increase spend: We found that 80 percent of your revenue is driven by only 20 percent of your customers. Get that 20 percent to spend more and advocate for your business. Encourage them to spend more with BOGO deals, upsell opportunities or bring friends to your business.

5. Stay on top of your lost customers. If a customer has left your business and hasn't returned in an extended period of time, they aren't lost yet! Re-engage that customer, and your business will see an even greater impact than acquiring a new customer. Solve the leaky bucket problem and keep your customers coming back.

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