Beyond Business Development - Keeping Customers Happy

Two areas you as a business owner need to be focusing your energy is on are social search and customer retention. Social search has become the new way for people to find out more information on products and services, and those who have a strong social media presence will attract and retain customers more effectively. To constantly change from one product or service to another puts us at risk of disappointment and constant switching. 

Customer retention is the best way to keep generating revenue year over year, but how do you keep the customers or clients long-term? 

In this blog, you’ll learn about our actionable insights on how to use our methodology, inbound marketing, social search and retention strategies for predictable revenue growth. 

 

Research from Bain & Co stated that increasing customer retention rates by 5% can increase profits by 25% to 95%. Why? Because customers who have already bought from you are more likely to repurchase. They already have a strong connection with you, enjoy your product or service, and develop loyalty towards the business.

We see it everywhere, not just with products and services. We rewatch the same movies or TV series repeatedly because it’s predictable, we know what happens, and we enjoy the plot. 

Retaining customers leads to strong testimonials, good reviews, and even bigger social proof that your business is worth investing in. Who doesn’t want that? But why is it costing businesses more to acquire than to retain? 

Both metrics are used to analyze how the business is performing and determine Return on Investment. 

 

Customer Acquisition: 

Customer acquisition is based on how much it costs for you to acquire one new client. You can find out the cost by dividing all the costs spent on acquisition, such as marketing, advertising, by the number of acquired clients during that period. 

The cost of acquisition has risen over the last few years due to data privacy, making it more difficult for companies and businesses to collect customer data.

Some brands have even seen a 50% increase in costs. For example, advertising on Amazon has increased from $0.93 per click to $1.20, a 30% increase. It’s no wonder acquiring new customers is becoming more difficult. 

 

Customer Retention:

On the other hand, customer retention is calculated based on the cost of keeping an existing customer repurchasing. Companies tend to review their retention rates annually, but it can be done on a quarterly or monthly basis depending on the industry. 

You find out your retention rate by subtracting the number of customers you had at the start of the year from the number of customers acquired, then divide by the number you ended the year with, and multiply by 100 to get the percentage. 

Let’s say you started the year with 100 customers and ended the year with 100 customers and acquired 10 throughout the year. 100 customers minus 10 acquired would give us 90. 90 divided by 100 x 100 would give us 90%. Our retention rate would then be 90%.

Another key metric you need to focus on to determine the performance of your business is churn rate.

 

Churn Rate:

This relates to the percentage of customers who stop doing business with you over some time. To find your churn rate, divide the number of customers lost during a set period by the number of customers at the beginning of that period. 

For churn rate, anything between 5-7% is considered average, but it depends primarily on the industry.

The churn rate is an important metric because it indicates something is wrong and highlights an underlying issue you need to address.

The more churn, the higher costs you need to endure to acquire new customers, but if customers are coming and going, the costs will continually rise. 

The solution? Look at what you are currently doing and try to spot any gaps or pitfalls.

More specifically, how is your customer service? Do you offer any incentives for new customers and old? Or once you get them into the business, do you forget about them and move onto the next?

The goal isn’t to forget completely about acquiring new customers but to find a balance between attracting new customers while nurturing the current customer base.

When you focus more attention on retaining the current customers, you can start to create a strong and sustainable foundation for revenue growth. 

One of the best ways to balance the two is through our methodology, Inbound Marketing. 

Retaining loyal customers has many benefits, but among them are higher profit margins due to lower costs related to acquiring new customers, higher referral marketing potential because of their loyalty and most importantly, increased Lifetime Customer Value (CLTV). 

CLTV is the total amount of revenue a business can expect from a single customer account. It helps companies understand the relationship between them and their customer.

When you nurture this customer and provide value, you get repeat purchases, upsells, and cross-sells that contribute to your CLTV. The more satisfied your customers are, the higher the CLTV. 

At GoViral, we implement inbound marketing as the best way to attract, engage, and retain customers because of its focus on loyalty and advocacy. 

Compared to outbound marketing where companies send cold emails and calls, inbound marketing relies on creating an ecosystem where customers feel valued and seen as every touchpoint. 

By producing valuable content that informs, educates, and entertains their customers, they are attracted to your business and move through the funnel to engage. 

Engage is part of the customer’s journey, where the company offers relevant advice and solutions that resonate with the customer’s pain points. Examples of this content could be how-tos, guides, and detailed blog posts that position you as the go-to expert and build trust and credibility with your customers. 

One of the key differences between outbound and inbound is personalization, which as we know has become a huge focus for customers over the last two years. Since the introduction of AI, customers are looking for more personalised content from businesses. 

Personalised email marketing and content recommendations strengthen the relationship with your customer because it shows you care and listen to what they want.

Businesses that respond back to customers’ comments in a timely manner and implement their feedback have a higher chance of retaining them for long periods because of trust. 

Instead of viewing the customer’s journey as a funnel, inbound marketing is a continuous cycle of attracting, engaging, and delighting customers over and over. 

When you produce relevant and engaging content that speaks to your customer’s pain points and continuously build a real connection with them, the relationships continue long-term. 

However, there’s been an interesting shift lately, with fewer and less people focusing on engagement metrics and more on customer loyalty. 

Engagement rate has been the most important metric for most businesses for some time as it’s an indication they like what you are producing. However, likes and comments don’t always correlate to sales. 

Engagement focuses on immediate interactions and short-term interest and can be manipulated based on fleeting trends. 

Instead, customer loyalty is where the recurring sales and revenue lie because it shows the customer is invested in your business and keeps coming back for more. Switching from chasing new customers to retaining current ones saves you time, resources, and ensures long-term success. 

 

Why the shift?

Companies are realising the importance of retention and the value that lies within creating real relationships with their customers and increasing their CLTV. Acquisition is just the first step, not the end goal. 

Advertising costs are continuing to rise and as more companies fight for people’s attention, it’s becoming increasingly costly to acquire new clients continuously. 

Recurring clients spend more than acquiring new clients. Companies that prioritize selling to an existing customer have a 60% to 70% chance versus a 5-20% chance of selling to a new customer. 

Nurture those customers!

A good customer experience is the biggest factor that contributes to gaining a loyal customer. Companies that implement retention strategies focused on personalized, seamless, and valuable experiences have a higher chance of recurring revenue and higher CLTV. 

Google is still a powerful search engine, but more and more people are searching for their next product or service on social media.

Platforms like TikTok have become a tool for many, and the platform is seen as a search engine. Social commerce is also another aspect of social media that has blown up in the last few years, where customers can now buy within the app. 

One popular feature of TikTok is the introduction of TikTok shop, where many influencers and content creators promote different products across the platform through affiliate marketing, which has become a huge trend. 

Social proof always gets customers over the line, but it has never been as powerful now, especially with many doing try-on hauls, unboxing, and giving their personal experience with a business. 

Customers search for authentic and relatable content that they can trust, and are more likely to trust people they know over a business stating they are the best than the rest. When was the last time you went out for dinner? I’m sure you searched for the best restaurants in your area, checked their reviews on Google or TripAdvisor, and searched on social media for honest reviews. 

 

So what does this have to do with customer retention? 

Social search has become a cost-effective way of finding out what your customers are saying about your business. It also allows you to speak directly to your customers in real time and get feedback on how to improve your product or service.

This direct line of communication is perfect for fostering a strong connection and establishing trust with your customers, involving them in the process. 

It also gives you the chance to give your customers a customer experience to remember. Things go wrong and the last thing you want is to leave your customers on read or worse, ghost them completely. Offering a direct line for customer support means you handle any negative feedback quickly and reframe the experience a customer had. 

Adding social search as part of your customer retention strategy is a cost-effective way to keep those loyal customers coming back again and again. 

Now that we’ve covered each tactic, it’s time to see how they interconnect with each other. When you understand how these elements work together, it creates a holistic customer experience that attracts, engages, delights, and retains customers for long periods of time. 

 

Social Search (Attract): 

You’ve been posting valuable content online that attracts potential customers who are searching for more information and solutions. Make sure to optimize your profile with specific keywords and hashtags that make you discoverable. 

Social search helps your ideal customers find you. 

 

Inbound Marketing as the Journey (Engage and Delight): 

Once your ideal customers find you, the inbound marketing takes over and guides them through the customer journey. Valuable content, personalized experiences, and genuine interactions help you build trust and rapport with them. 

Inbound methods set the tone for the relationship with your customers. 

 

Retention as the Foundation (Delight and Beyond): 

By implementing retention strategies, your customers can keep receiving value, which leads to stronger loyalty and advocacy for your business.

Customer feedback is crucial and makes your customers feel a part of the process and builds a strong community around your business. 

This is how you create brand advocates. 

 

Implementing the Strategies: 

• Content Strategy: 

Make sure to address your customers’ pain points at every point of the funnel. You want to create valuable content that increases your brand awareness, but also nurtures the customers who follow you already. 

 

• Community Building: 

Build a community around your brand through forums, online communities such as Discord or Telegram, and respond to your customers, showing interest in what they have to say. 

 

• Personalized Email Marketing 

Nothing says ‘I see you’ than receiving personalized emails (not in a creepy way..). If you have a large customer base, segment audiences to send the right emails that align with them. You can do this by basing it off particular characteristics each segment shares or buying habits. 

Another great way to make a customer feel seen is sending personalized birthday emails with a special offer. Is there anything better than getting 50% off on your birthday? I think not! 

 

• Track the Data 

Track and analyze what is and isn’t working and double down on what resonates most. This cuts time and effort in half, so the quicker you start getting results, the faster you can adapt your strategy. 

 

• Customer Feedback Loops: 

Listen to your customers because they do know what’s best. When you work in your business, you might find it hard to objectively evaluate how good your product or service is. Customer feedback gives you a better understanding of the gaps you might be missing. 

By integrating these strategies, you not only create loyal customers who will be brand advocates and repeat customers, but will be able to predict and sustain a flow of revenue. 

Customer acquisition is getting more and more expensive every year. By adding social search and customer retention strategies like social listening and community building, you’ll reduce costs and build a consistent revenue stream. 

At GoViral, our inbound marketing methodology delivers proven results. Through personalized email campaigns, targeted PPC, and engaging social content, we work closely with our clients to boost CLTV. Did you know that increasing customer retention by just 5% can boost profits by 25%? 

Contact us today to learn how we can increase your CLTV while significantly decreasing acquisition costs.