How to Increase Revenue Without Acquiring New Customers
What’s your company’s growth strategy?
Businesses need continuous development to get out of a plateau.
I’ve spoken to many people about their marketing plans, and most of them are trying to come up with new ways to add more customers.
While customer acquisition is great, it’s not always necessary if your primary goal is to increase revenue.
Focusing on your existing customers will save and make you money too.
Don’t believe me?
Calculate your customer acquisition cost:
That’s how much money it takes for you to get just one new customer.
Was it higher than you thought it would be?
If you’re spending too much money on customer acquisition, it could bleed your company’s bank account dry.
Now, divide that number by 7.
Do you think that’s a little bit more reasonable?
Well, that’s how much it will cost you to retain an existing customer:
Plus, it’s easier to retain a customer.
They are already familiar with your brand, products, or services. There’s no learning curve and no need for the proof of concept with these customers.
You just have to keep them engaged and give them a reason to keep coming back.
If your current growth strategy isn’t working, it’s time to put a new one to the test.
Instead of focusing on new customers, put more effort into your existing ones.
Emphasize the customer experience
Evaluate your process.
What’s the step-by-step procedure a customer needs to go through to complete a sale?
Put yourself in the shoes of a consumer, and build a customer journey map.
This will help you determine the strengths of your organization as well as areas needing some improvement.
Having repeat customers doesn’t mean your system is perfect.
Your customers may not be completely satisfied, but they’re waiting for you to make the necessary adjustments.
Anything you can do to make things easier for the customer will improve their experience.
That’s why nearly 90% of businesses say customer experience is a driving force for loyalty and retention.
Here’s why that’s important.
Eighty-eight percent of consumers said they would pay more for a better customer experience.
Your existing customers are willing to pay more for your products and services if you can improve the existing process.
But here’s a problem I see all the time. Businesses don’t know how to identify those areas that need improvement.
Earlier I suggested building a customer journey map, but that doesn’t work for everyone. You need to ask your customers directly.
Give your customers an opportunity to speak their minds.
Even if they are complaining, it’s good for your business.
For every 26 unhappy customers, 25 will leave without saying a word.
You still have the opportunity to salvage the relationships with the ones who complained.
Chances are if one customer has feedback about your company’s product or service, they aren’t the only one who feels that way.
Take the results of your surveys and interviews very seriously.
Here are some examples of improvements you can make:
I realize it’s tough to implement lots of changes at the same time. But don’t get overwhelmed.
Focus on one thing at a time, and make sure each adjustment improves the customer experience.
Enhance customer loyalty
Loyalty is a key factor in customer retention.
Just because your repeat customers continue to buy from your business does not mean they are loyal.
Your company may just be convenient for them at the current time.
Here’s a hypothetical scenario to illustrate my point.
Let’s say you own a local coffee shop.
You have a customer who comes in nearly every day for their morning espresso.
This customer doesn’t like going to national chains, and you’re the closest local spot to their home.
They don’t mind the 10-minute drive each day as long as they are supporting a local business.
However, a new local coffee shop just opened up, and it’s only 2 minutes away from the customer’s house.
A loyal customer will continue to make the 10 minute drive to your place.
See the difference?
It also depends on your industry:
Look at where coffee is in this graphic.
It’s a retention-dependent industry whereas a low-frequency purchase, such as a vehicle, is more dependent on acquisition.
The average American has a car for 6.5 years. It’s difficult for an auto sales company to maintain customer loyalty over such a long period of time.
But it’s not impossible, especially if you can get that customer to keep coming back for regular maintenance and services on their vehicle.
What’s the best way to create loyalty?
In the ecommerce industry, you have to have strong email and social media marketing skills.
Both of these channels keep customers engaged, allowing you to establish personalized connections with them.
I’ll elaborate more on these topics as we continue.
Master your email marketing strategy
Don’t make it complicated.
Email marketing may be simple, but it’s super effective.
Make sure your messages provide value to the recipient.
Don’t send emails just for the sake of starting a new campaign.
Consider the following reasons for contacting your subscriber list via email:
Don’t spam your customers.
Receiving emails too frequently can be a major turn off for them and cause them to unsubscribe from your list.
For retail businesses, email marketing had the most significant impact on customer retention rates:
Here’s something else to consider.
Not all your current customers are subscribed to your email list.
Converting your existing customers into your subscribers should be part of your retention strategy.
You just have to give them an incentive to sign up.
Offer a discount.
Look at how Perry Ellis does this on their website:
You can use the same strategy on your site as well.
Ecommerce stores can also include an opt-in CTA in the order confirmation messages to those who checked out as guests.
You’re contacting these people regardless, so it makes sense to give them this option.
To give the customer some extra incentive, you can include a discount or exclusive offer here as well.
Personalize your communication when contacting customers via email.
Include their first name in the message.
Consider your tone when you’re writing.
Your voice shouldn’t sound robotic (even though the message might be automated).
Which one of these opening lines sounds better to you?
The second option is much more personal.
This strategy will increase your open rates.
You can use your email marketing strategy to re-engage with customers who haven’t been active in a while.
This message will show them you appreciate their business.
If you can re-connect with a customer who hasn’t bought anything from your brand in the last 6 months, it will help increase your revenue.
Here’s an example from St. Jude Children’s Research Hospital:
Even if your company isn’t a nonprofit organization, you can still employ the “we miss you” tactic.
Embrace social media to connect with your customers
If you want to have high customer retention rates, you can’t slack off in the social media department.
Consumers use Facebook for much more than just uploading pictures from their most recent vacations.
They want to interact with brands as well.
There are over 65 million local businesses on Facebook’s platform.
Your customers are significantly more active on these social channels than they are on your website.
It’s much more convenient for them to contact you here.
This goes back to what we discussed earlier regarding the customer experience.
If the only way your customers can contact you is Monday through Friday via telephone between 9:00 AM and 5:00 PM, that’s going to limit customer satisfaction.
But if you’re active on social platforms like:
your customers have more options and can select one based on their preference.
If you can find ways to increase engagement with your current customers, your revenue will grow as a result.
Live video streaming can help you accomplish this.
Consumers love live video content.
Compared to a pre-recorded video, people watch live streams three times longer, which means they’re engaged.
Think of your stream as a television show.
Don’t just come on randomly whenever you feel like it.
Schedule a time once a week to broadcast so your followers know exactly when they can expect to hear from you.
Getting weekly viewers can establish brand loyalty, which we discussed earlier.
Marketers who currently use live video to engage their existing customers believe it establishes a more authentic interaction with the viewers.
Here are some additional social media engagement tips:
That last point is one of my favorite techniques, especially if you’re trying to create an effective customer retention strategy.
Everyone loves to get something free. So, give the people what they want. Or at least give them a chance to win.
Starbucks does this all time:
Their #RedCupContest encourages customers to design a cup and share their photos on social media.
It’s a brilliant strategy in terms of brand exposure in addition to the customer retention benefits.
Learn how to cross-sell and upsell
You can generate more revenue from your current customers by getting them to spend more money each time they make a purchase.
Here’s how it works.
Upselling encourages a customer to buy something similar to their initial purchase, but “higher end” (and more expensive).
Cross-selling entices the customer to make a purchase that will compliment something else they’ve bought.
These strategies are effective regardless of your industry.
It doesn’t have to be a tangible product.
For example, if you run a website to generate revenue, you can offer a more expensive monthly subscription to your users as an upselling strategy.
Businesses offering a service such as insurance cross-sell to their customers by offering home insurance as well as auto insurance.
Find out how you can apply these strategies to your business.
B2B companies have adopted this strategy too.
The more products or services your customers buy from you, the more likely they are to become emotionally invested in your business.
This establishes customer loyalty, the importance of which cannot be overstated.
While getting new customers is always exciting for a business, it’s not the only way to increase your revenue stream.
Look at your customer retention strategy first.
It’s often easier and significantly less expensive to implement than the customer acquisition strategy.
The customer experience is vital.
Focus on ways you can make adjustments that enhance your current process, structure, and platforms.
If you’re struggling to identify areas needing improvement, ask your customers for feedback through a survey or interview.
You need to increase customer loyalty.
Recognize that repeat customers are not necessarily loyal customers.
It’s important to know the difference.
The top two ways to increase loyalty and retention are:
Mastering these strategies will improve retention rates throughout the customer life cycle:
Personalize your email campaigns.
Make sure your email provides value to the subscriber.
Try to get your existing customers to opt in to your email list if they haven’t subscribed yet.
When you’re interacting with customers on social media, you need to encourage engagement.
That’s why live video streams are such an effective strategy.
You can also increase revenue by getting your existing customers to spend more money each time they purchase something.
Cross-selling and upselling techniques can accomplish this for you.
You need to promote your most profitable products and services while learning how to recommend other complementary purchases.
If you follow these tips, you’ll generate more revenue without having to add new customers.
What kind of social media promotion are you going to run in order to engage your followers and increase customer retention?
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November 13, 2017 at 10:02AM
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