Acquiring new customers is hard – and expensive. By this logic, holding on to your existing customers should be the #1 priority of every business owner… right?
Well, a lot of them don’t seem to understand it! And yet, customer retention is a balancing act every company has to nail to a tee if they hope to survive and thrive in today’s marketplace.
Otherwise your competitors will poach your highest-value customers quicker than you can say “churn rate!”
You can do better than just keep your customers steadily paying the same sum of money for your product or service. Not only can you make sure they don’t “abandon ship” in favor of your competitor, but actually spend more money with you – and love every second of it!
Interested? Below you’ll find five methods to make it happen. Let’s dive in!
1. Encourage to pre-commit
Sometimes it makes more sense to ask a potential customer for a bigger commitment. Why land a client on a monthly contract, if you can bill them for a year, or more? This approach works wonders for memberships and other recurring payments (when done right).
Example: This strategy is behind every discounted annual plan you’ve ever seen. Who doesn’t want to save money on a recurring subscription by paying for the entire year upfront? And once it’s done, who doesn’t hate to cancel a perfectly good subscription before it expires?
2. Solve their financial objections
If your customers can’t afford to pay for your product or service upfront, you have two options. The first one is saying, “No can do!” – and losing a sale. The second one is giving them a more flexible payment plan – and possibly acquiring a customer for life.
Example: Look at any high-end online courses you’ll find on the web, and you’ll see that they have an option to pay in multiple installments – sometimes as few as 3 or 4, other times as many as 12. There’s a good reason for that: offering flexible payment plans raises conversion rates and boosts retention. After all, “12 payments of $99” sounds so much better than “$1,188”!
3. Make repeat purchases frictionless
If someone bought from you once, they are much more likely to do it again – especially if it becomes much easier to do. If you play your cards right, and make repeat purchases as quick, painless, and easy as possible, you will see your bottom line explode with all the extra revenue!
Example: Amazon’s function of 1-click ordering is the textbook example of this strategy in action. Amazon uses this psychological hack to generate billions in repeat sales every year. News flash: when you know that all you need to do to buy something is make one click of a mouse, it becomes very hard to resist. You can adopt a similar strategy with your existing customers, encouraging them to make repeat purchases with zero hassle.
4. Upsell, downsell, and cross-sell
Once a customer has bought something, you have a short “window of opportunity” when they’re in the mood to pick up something else immediately afterwards. A smart upsell, cross-sell, or downsell can boost your overall sales by 15-20% – no new leads required!
Example: There are literally too many to list. Consider the most successful cross-sell of all time, “Do you want fries with that?”. And if you’ve ever bought an extended warranty on electronics, or a tech support and web design package for your website, then you’ve experienced the power of upsells first hand!
5. Use the “Ikea effect“
People are scientifically proven to like something a lot more if they took part in creating it. That’s right: your annoying friend who carries his hideous self-made leather wallet everywhere he goes just can’t help it!
The “Ikea effect” is well-researched, and it’s very real. You can use it to your advantage when rolling out new products or services, or just giving your target market a degree of control over a finished product. The secret is to make them a part of the process.
Example: Recruit groups of early adopters to try your product or service and help improve it with honest feedback. If selling stuff online, give your customers an opportunity to customize their appearance – even something as simple as picking a color, or a type of fabric, makes people more likely to buy. If selling software, let your customers use a demo version to create something cool – this will make them want to buy a full license that much more.
There you go – these 5 strategies will dramatically prolong the lifecycle of each customer you get, and make it much easier for you to turn one-off transactions into lucrative business relationships for life. Enjoy!