These days customers can spend money at hundreds of businesses. Most products and services are sold by a significant number of companies, and as a result, customer acquisition and customer retention are important pillars of business strategy.
To bring in and retain as many customers as possible, the companies need to apply several different plans.
Customer Acquisition vs. Customer Retention
Customer acquisition and customer retention go hand in hand. While they might sound like different things, it is proven that it costs five times less to retain a customer than acquire a new one. As a result, it is much more cost-effective to focus on customer retention rather than customer acquisition.
Additionally, recent studies have found that increasing your customer retention rate by just 5 per cent should boost your profits by 95 per cent. There are a few things you can do to retain a customer base, but they boil down to three main policies.
i). Align Personalized Offers and Customer Tribes
Creating personalized offers and deals to make customers feel valued is crucial in customer retention. Customers want to feel appreciated for their loyalty, and special deals help with that. However, it can be challenging to personalize offers to each customer.
Instead, one can personalize offers by aligning them with customer tribes. For example, to have special discounts for students. Most students don’t have a lot of extra money to throw around, so if a business doesn’t give them a special offer, it probably won’t retain them.
However, if a student gets a discount, they will feel appreciated, and they will be more likely to stick around even after they no longer qualify for the promotion. They will feel appreciated, and they are less likely to switch to another business.
ii). Improve the Customer Experience
If the customer experience is not enjoyable, customers are not likely to come back to make future purchases. For example, many businesses force customers to verify their identity every time they come back to their online store. This process is annoying and does not make for an enjoyable customer experience.
Some businesses have since switched to digital verification. By doing so, these businesses can better personalize offers that are attached to their rewards programs.
iii). Implement Personalized Offers Throughout the Year
People shop at different frequencies throughout the year. Events like the holidays and the start of the school year are big shopping times in particular.
As a result, customers are looking for deals at these times so that they can save some money. Having sales at this time will do wonders for your customer acquisition and customer retention.
Take Advantage of Identity Marketing in Customer Acquisition Marketing
This topic was briefly touched on above, but identity marketing is essential to implement in the customer acquisition plan.
Not only will it help retain old customers, but it should help bring in new ones. This strategy focuses on the end stage of the customer purchasing process, rather than over-investing in online advertising.
i). Personalization Is Rooted in Identity
When a business launches a customer acquisition marketing plan that focuses on identity, it generates a strong emotional connection between the brand and the customer. Data has shown that when you gravitate to customers emotionally, they spend up to two times more than other consumers.
ii). Verification Helps Build Trust
While it is essential to bring in a significant number of customers, they will not return if they don’t develop trust for a business.
They need to trust that the business will be consistent in providing deals, discounts, and other rewards to loyal customers. Conversely, the business needs to trust that they will not try to take advantage of discounts that they do not qualify for.
Verification ensures that the customer knows that the offer is legitimate and that it is exclusive. It also protects the bottom line of the company because it ensures that people cannot claim discounts they do not qualify for.
Factoring in Customer Acquisition Costs
Running a business requires that the owners keep an eye on your finances with everything they do. That applies to customer acquisition as it does with everything.
As a result, it is essential to track the money spent on customer acquisition and customer retention plans vs. the number of acquired and retained customers the business gets from that plan.
Customer acquisition and customer retention are crucial aspects of running a business. A company makes money by making sales, and to sell products, they need to have customers.
As a result, it is essential to implement a customer acquisition strategy in the most effective way possible.
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I am Adeyemi Adetilewa, a media consultant, entrepreneur, husband, and father. Founder and Editor-In-Chief of Ideas Plus Business Magazine, online business resources for entrepreneurs. I help brands share unique and impactful stories through the use of public relations, advertising, and online marketing. My work has been featured on the Huffington Post, Thrive Global, Addicted2Success, Hackernoon, The Good Men Project, and other publications.