How to Prioritize Customer Retention in Your Digital Strategy

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New survey data shows that in the new digital normal, businesses are keeping a close eye on their customer retention rate.

In the new digital normal of 2020, customer retention is top of mind for most business owners. But don’t just take our word for it: We asked your peers.

In Capterra’s July 2020 Digital Transformation survey* of over 500 small business owners, respondents indicated customer retention as their top short term and long term business goal. Customer retention was ranked as top priority over increasing cash flow, cutting costs, and finding new customers.

As so many small businesses know, the secret sauce in keeping your current customers happy and prone to return is both thoughtful communication and a personalized customer experience. Today, the big question for business owners is how to maintain this communication and personalization when all the interactions with your regulars has to be done online?

In this report, we review some key findings from our survey of small business owners and break down what they’ve prioritized in their digital strategies and how well those strategies are working. We will also hear from two small business owners whose keen digital business strategies have helped their business’ brand and led their small businesses to thrive in these uncertain times.

To prioritize customer retention in your digital strategy, make sure to:


Play to your strengths on social media

Given a prioritization of customer retention, how are businesses feeling about the digital strategies they’re employing?

The survey of small business owners found only 25% of respondents feel they have been very successful leveraging digital environments (e.g., social media, website) to engage with their customers.

Paige Arnof-Fenn, founder of the marketing consulting firm of Mavens and Mogels suggests businesses leverage their social media accounts and position themselves as thought leaders:

Paige Arnof-Fenn

Founder of Mavens and Mogels

“Thought leadership marketing is an effective tool that creates great customer engagement and retention. Don’t let social media drive you crazy; you do not need to be everywhere. Just pick one or two platforms that are authentic to you. It should look and sound like you and the brand you have built.”

Whether you are marketing your business on Facebook, Twitter, Instagram, or elsewhere, make sure you’re utilizing the platform’s localization tools. Your repeat customer is probably close in proximity to your brick and mortar location, so even in this digital era you should consider focusing your marketing campaign efforts on local customers.

For a more in depth discussion on how to accomplish this, check out Local Marketing for Small Businesses: How to Use Precision Targeting in Social Media.

Get personal with your customers

Let’s take a closer look at what businesses are doing in their digital environments to retain and engage their existing customer base:
In our July 2020 business owner survey, we asked business owners how they are leveraging their digital environments.

These results indicate a huge opportunity for businesses to stand out and make an impression on their customers by being personal. While most businesses are using their websites and social media pages to promote sales and alert consumers to updated hours, a little more than half of businesses engage in a dialogue with their buyers, and fewer still leverage their digital platforms to address common questions and concerns.

To Willie Greer, founder of The Product Analyst, a small tech startup that tests and reviews audio equipment, the key to customer retention is the customer who knows you and feels represented in your digital spaces.

Willie Greer

Founder of The Product Analyst

“Allow your customers to share stories of their own and experiences too. Sometimes, it gets boring to just see technical reviews and base from them, because, for some, it lacks authenticity and is basically a programmed write-up. So allow your platform to share personal and firsthand stories of clients on the product you are selling. This way you get to know them in a personal line, and surely that will call for a customer to recall you or your brand too.”

Whether you are shopping digitally or at a brick and mortar store, customer expectations are to have a pleasant, personalized experience. In order to prioritize customer retention, businesses should strive to recreate the same personal experience online as they offer customers in a traditional store. This can be done by focusing on the customer journey and creating space for customer feedback.

Nurture your existing email list

In addition to fostering a relationship with your customers on social, make sure you use your other main source of communication: email.

When we surveyed business owners, 42% of respondents have implemented or plan to implement a temporary shift towards online marketing efforts. Email marketing could be an effective strategy for those increased efforts.

“To stay connected, I am a big fan of email marketing” says Paige. “It is a cost efficient way to build your brand and deepen your relationships through ongoing communication. In my experience, it is best to make it mobile friendly; the world is moving to mobile only with fewer people accessing email on big screens so tailor your message and content accordingly.”

Willie suggests using freebies or a customer loyalty program to incentivize joining or staying subscribed to your email lists: ”You would surely want them to direct into subscribing in your email list, but first things first, you have to make sure that they get something in return. So whether it’s a checklist template or recipe or voucher card, make sure you hinge them into subscribing to your platform because not only will that generate a sale, it keep them on your contact list for future transactions.”

Build community

Our business owner survey found that since the start of the pandemic, the percentage of businesses that are now fully virtual or digital rose from 3% to 21%.

The trend towards digital business and commerce is here to stay, and customers will expect the ability to digitally shop, connect, and network with their preferred businesses long after we’ve put our masks away for good.

Investing in building your business in the digital community now will set you up for success both in the short term and the long term. Building a customer relationship increases brand loyalty and leaves you with a happy customer, and that’s a win-win situation.

Unsure of where to start? Paige suggests contributing to existing community message boards and social groups. “Instead of trying to start your own blog or newsletter, try contributing regularly to existing well trafficked blogs in your industry or newsletters of like-minded organizations reaching the same target audience as you. Make sure you put your URL or contact info on it so they can find you and follow up.”

You could also consider starting a customer referral program, which would bring in new customers and build loyalty, as well as increase your existing customer retention rate.

Retaining customers in a digital age

For many businesses, transitioning to virtual interactions has come with a learning curve. The new normal means new metrics of customer satisfaction, new ways of thinking about customer retention rates and churn, and new strategies for building community and quality customer service.

A strong digital strategy will help your business increase its customer retention rate and better prepare you for tomorrow’s unexpected twists and turns.

For more insights on customer retention and business strategy, check out these Capterra articles:


Survey Methodology

*Results based on Capterra’s Digital Transformation survey of 503 small-business leaders, defined as presidents/vice presidents, C-suite, or owners/founders at U.S. companies with two to 250 employees in March 2020.

Looking for Customer Relationship Management software? Check out Capterra's list of the best Customer Relationship Management software solutions.

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About the Author

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Samantha Bonanno

Sam covers Buyer Marketing at Capterra, offering insights and thought leadership on marketing trends and best practices for small and midsize businesses. An Upstate New York native, Sam spends her free time backpacking with her dogs and holding snobby opinions on craft beer and single origin coffee.

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