The Best Way to Get New Customers Is to Keep the Old Ones Happy
It’s a well-established fact that attracting new customers (acquisition) is significantly more costly than keeping old ones (retention). In fact, it can be up to 5 times more expensive for companies to try to acquire new customers than it is to keep existing customers satisfied and eager to purchase more. The channels used for customer acquisition require more up-front costs and the ROI is harder to guarantee or even predict. Robust marketing, remarketing, outreach, sales-tactics, multifaceted teams, and bloated budgets are the standard for acquiring new customers. Meanwhile, retaining existing customers is a matter of simply providing good products, good customer experience, and customer service, and strategic and fluid communication.
Keeping in mind consumer behavior, it makes sense for people to be more likely to purchase products, including consumer electronics, based on pre-existing experience and satisfaction, than it is for them to take a gamble on a new product or brand.
Once you’ve spent good money on sales and acquiring a solid customer base, apply the following tactics to keep your customers satisfied and loyal to your brand and products to create an endless loop of purchases and feedback.
Make LTV (Lifetime Value) a key metric, woven into your financial ethos
The Lifetime Value (LTV) metric represents the total customer profitability over time. With enough available data, you can calculate LTV and identify streams that generate the best value customers, therefore making more strategic decisions that will reduce your acquisition spend over time and help create a sustainable retention strategy.
Understand your Promoters and Detractors
The second acronym to be aware of is NPS, or Net Promoter Score, which measures the feedback value of your existing customers. In other words, does your customer act as a promoter, or a detractor? A promoter is a satisfied customer who doesn’t shy away from sharing positive feedback publicly and becomes an organic brand ambassador. They are the most important type of customers to identify, cultivate, and nurture. Promoters who have influential platforms — a YouTube channel, website, blog, social media presence, etc., can be turned into an affiliate and generate sales, while promoters without a platform can become organic champions of your product and examples of your stellar CX and communication efforts. A detractor is the opposite, typically a distraught customer who’s feedback acts as a deterrent from purchasing your products. Ideally, through a solid customer experience journey, a detractor will be prevented in the first place, but should that effort fail, it’s important to mitigate detractors early, as their impact can be devastating to your bottom line, as online reviews significantly influence purchasing decisions.
Focus on Experience
The more value a user derives from your product, the more likely they are to use it and keep using it. Instead of focusing on a single feature or function, offer customizability, variety of functions, agility, useful updates, or content. Take as an example ANOVA, a manufacturer of cooking equipment that focuses on one-use appliances like sous-vide or precision ovens. Their products themselves don’t offer much flexibility in use, as they are not themselves multi-purpose. They overcome this by offering hundreds of recipes that can be made using each of their products. The recipes are a part of their offering and are easily accessible from the onboarding process onwards, expanding the value of their app and digital channels, creating more reasons for customers to return.
Make every step of your product’s experience frictionless and focus on the journey from pre-purchase to onboarding to end-use and flow of communication feedback with your customer. The more present your product and your communication is in their lives, the more likely they are to become your loyalists, provided your product meets or exceeds their needs and expectations.
Create A Personalized Journey
Getting to know your customers is the first step toward creating a personalized experience for them. Get to know them in order for them to get to know you. Collect data and learn as much as you can about your audience and their behavior — ideally via a Segmented Net Promoter Score — and then create a custom journey for each, from personalized communication to seamless onboarding and customer service with a human touch and genuine care. From the onboarding stage, observe the behavior of your users to identify any points of friction or confusion, then use this feedback to optimize the rest of the experience to create a seamless ramp-up and the rest of the journey.
The Takeaway
The best resource your team has is your existing customers. This includes your sales team, your dev team, your marketing team, and your finance department. Nurturing existing customers through every step of their journey, as they use your product, creates not only loyal customers with good LTV but also an invaluable source of data and feedback. Solid understanding of your customer journey, as well as an understanding of your most important customers — the promoters and the detractors, will future-proof your product and improve your chances for customer loyalty.
