While attracting new clients is a common marketing goal for many companies, it is essential not to overlook the potential of working with the existing client base. In fact, effectively engaging and retaining current clients can yield higher profits than constantly expanding the customer base. In saturated advertising channels, the cost of acquiring a lead often outweighs the profitability of a future transaction. Only when a client becomes loyal and consistently purchases from the company, we can truly see the return on investment and profitability.
In this article, we will explore strategies to foster customer loyalty, encourage repeat purchases, and increase the average order value. By implementing these tactics, businesses can unlock the full potential of their existing client base and drive sustainable growth.
Customer segmentation
To effectively manage your customer base, the initial step is to centralize all customer information into a convenient database and gather as much data as possible for each customer. This comprehensive customer database lays the foundation for the next crucial step: customer segmentation. By segmenting your customer base, you can tailor your approach and engage with customers on a more personalized level. The more data you have in your database, the more flexibility you have in creating meaningful customer segments.
Engaging with customers: touchpoints and marketing channels
After segmenting your customer base, it’s important to consider the various touchpoints and marketing channels through which you will interact with each customer segment. This can include:
- email newsletters;
- SMS messages;
- messaging apps;
- targeted advertising;
- (automated) phone calls, etc.
By utilizing these different channels, you can effectively reach and engage with each customer segment in a personalized and impactful way.
Promotions and special offers
To effectively interact with specific segments of your target audience, it is essential to leverage point interactions, particularly during promotional events or special occasions.
For instance, if you have a promotion for a product that is purchased at regular intervals, such as FMCG products, you can use an easy scheme. Identify the segment of your customer base that has previously purchased this product within a specific timeframe, and inform them about the promotion. This targeted approach yields high conversion rates because these customers are already familiar with and actively using the product. By offering them a discount or other enticing bonuses, you create a strong incentive for them to make a repeat purchase.
It is crucial, however, to avoid bombarding customers with irrelevant information. Sending a mass email about the promotion to your entire client base could result in numerous inquiries from customers who are not interested in the offer.
Marketing funnels
Marketing funnels play a crucial role in automating customer interactions throughout and after a transaction, with the aim of improving KPIs such as:
- sales conversion;
- average order value;
- repeat purchases;
- cross-selling opportunities, etc.
Examples of marketing funnels include:
- nurturing customers during the decision-making process;
- engaging in post-sale activities after the initial purchase;
- reminding customers to repurchase cyclical products, etc.
For example, when purchasing goods from an online store, a buyer typically goes through several stages: considering the purchase, waiting for the product, receiving it, and using the product.
Initial stage
During the initial stage, our primary objective is to retain the customer. This is the moment when the customer has added the product to their cart but has not yet made the purchase or has inquired about the product over the phone. At this point, it is crucial to stay on the customer’s radar, highlighting the product’s advantages and the benefits of purchasing from your store. Sending special offers and promotions related to the product can also be effective. Additionally, it is important to remind sales staff to promptly follow up with the customer.
Upselling
When the customer has made the payment and is awaiting product delivery, we can focus on improving the average order value and cross-selling opportunities. This can be achieved by:
- providing information on how to use the product correctly;
- suggesting relevant accessories;
- offering tips on product care;
- suggesting potential upgrades or enhancements.
Email newsletters and messenger mailings are effective channels for delivering this information. Special offers, such as a discount on accessories within a week of the initial purchase, can also incentivize up-sales.
Delivery
Timely notifications regarding the delivery process and clear communication on when and how the customer can expect to receive the goods are essential. It is important to recognize that the main profitability lies in retaining loyal customers, and any issues or delays in the delivery process can negatively impact the overall customer experience.
Repeat purchase
Once the customer has started using the purchased goods, our primary objective is to encourage repeat purchases. This can be achieved through:
- personalized recommendations;
- targeted offers;
- ongoing communication, etc.
By consistently engaging with the customer and providing a positive post-purchase experience, businesses can increase the likelihood of future purchases and foster long-term customer loyalty.
Cross-selling
As we said before, one of the primary objectives of marketing is to transform new customers into loyal ones. To achieve this, it is crucial to establish logical connections between the various products offered by the company. By creating these connections, businesses can present customers with a range of accessories, products, and services, accompanied by personalized offers and promotions.
Ideally, cross-selling should occur at the point of sale, such as offering related accessories and services during the shopping cart and checkout process for online sales. However, it can also be implemented after the initial purchase by providing customers with valuable content related to their purchase, encouraging them to upgrade, providing guidance on proper product care, and offering logically related products.
The goal is to continuously engage customers and provide them with relevant and enticing offers that complement their initial purchase.
The importance of human interaction
While automation plays a significant role in customer interactions, it is important to recognize that not all interactions can be fully automated. Human interaction remains crucial for achieving high conversion rates and driving sales.
Consider a specific point of interaction with a customer, such as sending out a promotional email. After creating the targeted segment and sending the email, it can be highly beneficial to complement this automated communication with a personal touch. This can be achieved through a call center, where representatives can reach out to customers individually and provide them with detailed information about the promotion.
Conclusion
By investing in the loyalty of existing customers, businesses can benefit from repeat purchases and increase in the average order value. Satisfied customers are more likely to make additional purchases and potentially spend more budget each time. This approach not only helps to stabilize sales but also contributes to long-term revenue growth. Therefore, it is essential for businesses to recognize the value of their existing customer base and prioritize efforts to enhance customer loyalty.
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