Social Media Strategy, Social Media Marketing

15 Important Tips To Help You Keep Your Customers

badge guest post FLATTER 15 Important Tips To Help You Keep Your CustomersYou’re about to have many insightful statistics and research thrown your way, but before you dig in, let’s put the most important data point front and center:

According to the Harvard Business Schoolincreasing customer retention rates by 5 percent increases profits by 25 percent to 95 percent.

This is important to consider when evaluating your own customer loyalty strategies because in the customer service echo-chamber there is a lot of “hoo rah” about taking care of customers, but little discussion on the business side of things.

In order to help you increase your own retention rates, we’ve compiled a list of our 15 favorite tips (backed by academic research and case studies) on increasing customer loyalty, divided into five easy-to-browse sections: Communication, Selling, Reciprocity, Support, and Loyalty Programs.

Let’s begin!

Communication

It’s hard to create loyal customers if they aren’t paying attention to you. Given this fact, below are our favorite bits of research on clear communication with customers.

1. Stand for something.

The quickest way to get customers to ignore you is to not stand for anything. A study by the Corporate Executive Board that included 7,000 consumers from across the U.S. found that of those consumers who said they had a strong relationship with a brand, 64 percent cited shared values as the primary reason. If you want loyal customers, you need them to care about you.

So what do YOU stand for?

2. Utilize positive social proof.

While negative social proof (“Nearly 90 percent of websites don’t use heat mapping software!”) has been proven to dissuade customers rather than encourage them, numerous studies on customer motivation have shown that positive social proof (“Join 20,000 of your peers!”) is often the most effective strategy for getting people to listen.

3. Invoke the inner ego.

Despite what we often say, most people like things that resemble them in some way. This cognitive bias is called implicit egotism, and is an important thing to keep in mind when communicating with customers. In order to attract the sort of customers you want, you need to identify your target customers down to the last detail and then craft a brand message that perfectly matches their pains, goals and aspirations. It’s easier to fill this existing demand than to create one.

Selling

If customers don’t enjoy your selling process, they’ll likely never do business with you again. Thus, selling to customers the “correct” way is an integral part of creating customer loyalty. Below are a few studies to help you improve the process.

4. Use the words they love to hear.

Not all words are created equal. Certain persuasive words encourage customers to buy more than others, in particular: free, new, and instantly. When customers hear these words (and the promises they imply are backed up), they’ll enjoy their purchases more than they would have otherwise.

5. Reduce pain points and friction.

All businesses, no matter the industry, are going to have to sell to the three types of buyers that are out there. According to neuroeconomics experts, nearly a quarter of these buyers will be conservative spenders, or “tightwad” customers. George Lowenstein of Carnegie Mellon University recommends using bundles, reassuring words (e.g., change “a $5 fee” to “a small $5 fee”), and reframing as strategies to better sell to these conservative buyers. Read more about his advice here.

Reciprocity

Reciprocity is the social construct that makes the world go ’round… or in your case, keeps your customers coming back. The premise is simple: Go above and beyond for customers and get rewarded with repeat business. The execution, however, can be trickier, so below is a compilation of interesting research on how to improve reciprocity with your customers.

6. Realize that budget is negligible.

Giving back to customers can appear incredibly costly, but it doesn’t have to be. Instead, embrace the art of the frugal wow by understanding that reciprocity is built even with small gestures. In fact, psychologist Norbert Schwarz found that as little as 10 cents can create reciprocity between two individuals (it really is the thought that counts!).

7. Utilize surprise reciprocity.

Although reciprocity works incredibly well on it’s own, research shows that it is even *more* powerful when started by surprise. For a simple example, recall a time that someone did something nice for you unexpectedly; the gesture probably wasn’t all that unusual, but the fact that it came out of nowhere left a strong impression on you.

8. Make it personal.

In a study from the Journal of Applied Social Psychology, researchers found that waiters could increase their tips by 23 percent by the simple act of returning to tables with a second set of mints. So do mints have magic powers? Apparently not: The researchers concluded that the mints created the feeling of a personalized experience among the customers who received them. So it was the personalized service received that made them enjoy their experience so much more.

Support

This one is a no-brainer: You can’t create a tribe of loyal customers without an exceptional customer service experience that keeps them coming back. In this section, we’re going to bust a few customer service myths wide open, as well as tackle some important things you need to keep in mind when offering support online.

9. Speed is secondary to quality.

When it comes to customer service that keeps people coming back, the research shows that quality matters more than speed. According to a study by the Gallup Group, customers were nine times more likely to be engaged with a brand when they evaluated the service as “courteous, willing, and helpful,” versus the “speedy” evaluation, which only made customers six times more likely to be engaged.

10. Customers enjoy businesses who know them.

Telling your employees to spend more time with customers might seem like folly, but smart entrepreneurs know that isn’t the case. Numerous behavioral psychology studies have shown that everybody views their service experience as more positive when they don’t feel rushed or ignored. Don’t spend time idly, though; have employees attempt to find out key customer traits, just like Derek Sivers did with his employees at CD Baby.

11. Choose the right platform.

The best way to improve your online customer service efforts is to utilize the channel your customers most prefer. Although recent research has shown that a majority of people still prefer and use email more than other services (including social networking), you need to pick the channel that makes the most sense for your business. Hosting companies know that online chats are critical when their customers’ sites go down, but other businesses may have customers who are just fine using email as their primary method of contact.

12. Make it a communal effort.

Countless case studies have made one thing clear when it comes to creating an efficient support system: You need to keep everybody in the loop. At Help Scout, we use tools like Campfire to access real-time notifications of what’s happening on the customer end; we were able to improve our response time by 340 percent by enabling a support room that all employees can access. Read more about how we did it.

Loyalty Programs

The key to creating customer loyalty programs that work is to know why customers use them and what gets customers to keep using them. Below you’ll find consumer research that answers these questions.

13. Get people started.

Consumer researchers Joseph Nunes and Xavier Dreze are known for their studies on The Endowed Progress Effect. Their results have conclusively shown that the biggest wall that prevents customer loyalty programs from sticking is getting people started. They’ve shown through their notorious “car wash study” that people are twice as likely to finish loyalty cards if they are automatically started (or rewarded) as soon as they sign up. Read more about this process here.

14. Get ideal customers to be VIPs.

Additional research by Nunes on loyalty programs has shown that people just love being VIPs or gold members of programs. There is one caveat, though: This only works when people know there is a class below them on the totem pole. Speaking to human nature, Nunes saw a notable increase in gold members’ participation as soon as he implemented a lesser silver class.

15. Label your customers.

A research study on voting patterns conducted by Stanford University conclusively showed that people are more likely to participate in something if they are labeled with a positive trait. Our friends at Buffer refer to their premium customers as “awesome” members, and even label their upgraded payment plan as the “Awesome Plan”—a much easier phrase to embrace than “paid member.”

Your Turn

What are some other customer retention strategies that you use and would recommend?

Let us know by leaving a comment below!

Editor’s Note: A version of this article originally appeared on HelpScout.net.

  • http://twitter.com/GaryHyman Gary Hyman

    This entire article resonates very well with me. You’ve assembled everything in a great coherent, and understandable form. Another important data data point for your audience, which totally validates what you are saying, is that it cost 5-10 times more to get a new customer versus keeping an existing.

  • Heather Peterson

    Great article with great takeaways! We have a VIP program for our best clients but it has been hard to actually get the program to produce valuable results. I like the idea of creating a silver level to increase participation.

  • http://www.facebook.com/people/Sven-Georgiev/100003494597091 Sven Georgiev

    Jay, good stuff as usual. But you should include a button leading to a printable view of the article. For those of us who like to print and highlight words offline.

    • http://www.convinceandconvert.com/ jaybaer

      Hi Sven. Thanks. Just above the author bio you’ll see a “Print PDF” button (left hand side). That’s the ticket.

      • http://www.facebook.com/people/Sven-Georgiev/100003494597091 Sven Georgiev

        Thanks. Saw it now

  • Graciousstore

    These are great tips on how to retain customers/ It is important to let customers know what you stand for, so they can easily identify with you

  • http://www.giftsspace.com/blog Online Strategies

    It’s true that good customer service is the backbone of any flourishing business. To understand diversified customers, it takes a great deal of effort. You get information either to interaction or through the feedback. Social analytic is the way to go to know what people are really thinking about your product.

  • Samson

    One thing, I think, I can add; Get personal! Call your costumers by
    their names (first or last)! Find out about them (as much as practical) & use their names! Thanks.

  • Joanne Kaminski

    For the service that I provide, tutoring kids in reading, I use data to back up retention. I show clients where their child is now and where they could be if they stayed with me for 3 more months. I also utilize their referring power. I don’t always need to keep a client longer than is needed, but I can let them know the different ways that they can refer me to others who would be in need of my services. I ask them if they could post a positive response about the tutoring on facebook, leave a recommendation on LinkedIn or simply just mention my name if someone is in need. I get a really powerful response from this and 50% of my new clients come from referrals.

  • http://www.neteffects.com.au/helpdesk help desk

    I think one of the key in keeping your customers is building a good and genuine relationship and providing the best product/s that your customer’s deserve. You can do this by properly training your staff and equip them with the proper knowledge and skills needed.

  • http://resnarkable.com Lizzie Maldonado

    Great read! Thanks for writing. Sorry for the delayed comment, but I have a question for you about the “speed is secondary to quality” bullet point. Everything I have read recently (obviously this article is dated) says that customer responded far more positively to speed “even when the outcome wasn’t in their favor.” They also talked about the importance of fairness when dealing with customers (even, again, if it doesn’t go in their favor). Have you found anything personally about the difference between speed and quality since? Has your opinion changed? Am I reading the wrong thing? Obviously quality can never be discounted — even when speed is made the priority — but velocity is a big topic and speed is becoming a major differentiator where I sit. Just wanted to hear your perspective and didn’t know if it might spark an idea for a follow up post. Thanks!