July 5, 2021
Fix Your Leaky Bucket: More Strategies for Customer Retention
Keep those clients coming back with these strategies.

Person mopping while dog sleeps nearby; article on customer retention strategies

I shared some strategies recently for fixing your business’s leaky bucket — i.e., how to navigate customer retention.

The bottom line is this:

Acquiring a new customer can cost somewhere around five times as much as retaining an existing customer. You’re also much more likely to sell to an existing customer, with a success rate at about 60-70% (as opposed to the 5-20% success rate for selling to a new customer).

Another great reason to focus on customer retention strategies? Creating touchpoints for customers is key to ensuring customer satisfaction — which in turn can lead to client referrals. And as I discovered in this year’s dog trainer survey, client referrals are crucial when it comes to getting new business. (More insights from that survey soon to come!)

More Strategies for Customer Retention

I already talked through a few strategies in this blog post: website optimization, killer copywriting, using proven marketing tactics, and email newsletters. So what are some additional strategies you can use?

Here are just a few more.

Loyalty Programs

loyalty program is a customer retention strategy that rewards customers if they continue buying from you. You’re probably familiar with free perks programs — If you’re like me, you have a zillion of those little punch cards in your wallet promising a freebie once you’ve bought a certain amount of products.

Or maybe you’re a paid loyalty program member — Amazon Prime or a DoorDash DashPass account holders know all about these. You pay a fee that unlocks special offers or discounts, theoretically making up for the cost of the membership.

Other types of loyalty programs include:

  • Spend-based programs (a program that recognizes high spenders with elite status perks)
  • Tier-based programs (customers can unlock tiers of perks after spending certain amounts)
  • Community programs (becoming a member gives you access to a community with experts and/or other customers who share similar interests)

…That’s just to name a few.

One of my favorites, though, is a referral-based loyalty program, where you incentivize clients to refer their friends to you. It’s a win-win strategy: clients receive some sort of perk (a one-time discount, special pricing on services, merch, etc.) and you get more clients! A popular way to do this is to give clients the perk after their referral has signed up for one of your services, but it’s up to you if that makes sense for your business.

Want to learn more about creating a customer loyalty program that works? Here’s a great primer from HubSpot.

Customer Segmentation

Customer segmentation (also known as market segmentation) is a method that helps you target particular services or products to the customers who will want them the most. Though you can use this strategy for customer acquisition, I particularly like it for customer retention. Once you’ve already worked with a client, you have a much better idea of what they might need in the future.

Think about clients you’ve worked with in the past. If someone has been taking puppy manners training, are they likely to want a follow-up class on dog sports? Probably not! They’d be way more interested in advanced techniques for going on walks, or not jumping up on old Aunt Mary. Likewise, someone who has taken your intro to dog sports class will probably want to continue taking dog sports classes. They’re probably not coming to you to learn how to house-train their pups.

There are a couple of ways you can use segmentation:

  • Create personalized follow-ups. This includes touching base with customers after classes, asking for feedback, and reaching out about new offerings.
  • Optimize your email newsletter. That’s right — most newsletter programs have built-in segmentation offerings, also known as email automation. This works great for new customers — you can ask people what they’re most interested in when they sign up for your email newsletter. Then you just need to create emails that target those needs (educational content, freebies, and information on your relevant services). You can create similar email automations for existing customers, where you tell the program what kinds of emails to send their way.

This is just a taste of what you can do with email automation — and I may dive further into it in the future. For now, if you want to learn more about customer segmentation, here’s a good primer from The Motley Fool.

Customer Journey Mapping

Our third strategy for custom retention is mapping out your customer journey… If you haven’t already mapped your customer journeys — what are you waiting for?

I’ve talked about the importance of marketing funnels in creating your marketing strategy. And I shared how you can use backchaining to reinforce behaviors you want in your clients.

So at this point you should already have an idea of what your buyer personas are, and what the steps look like for them to get from a particular need to making a purchase.

When you map the customer journey, you get even more specific about

  • Who your customer is,
  • Why they’re looking for a product or service,
  • What their purchase timeline is,
  • How and when they’re engaging with your business, and
  • Where your touchpoints are

For example:

  • Brad is an IT engineer who works mostly from home. To keep him company, Brad decides he wanted a puppy.
  • Brad is a busy guy — he doesn’t really have time to train his new pup.
  • Brad searches for “puppy training near me” and finds your website.
  • Brad needs a little convincing that you’re the right person for the job, so he decides to read your blog.
  • Brad reads what you’ve written about R+ training methods. He’s hooked!
  • Brad checks out your class offerings and thinks they might be a little too pricey.
  • …But then he sees you have a deal where new customers can sign up for a low-price 1:1 consultation and get a discounted rate on their first class. Score!
  • Brad signs up for the consultation and loves talking to you. He’s convinced he needs to take a class.
  • But then Brad gets busy with work or life… and just forgets to take the next step.
  • Luckily, you convinced Brad to sign up for emails when you met, so he receives an email reminder a week later to sign up for your puppy manners training course coming up later that month.
  • The email makes sign up super easy — Brad clicks the link, puts down his payment, and he’s ready to go!
  • Brad and the puppy love your class. They’re ready to tackle their new life together.
  • A month later, the puppy jumps on old Aunt Mary — Shoot.
  • That’s when your follow-up email comes in — Just in time to check in on the puppy’s progress, and what their future needs might be.
  • Brad’s sold on taking a follow-up class with you.

…I could go on, but you get the idea here.

By getting into the nitty gritty of their journey, you can be smart about what their needs are every step of the way. Which means you can tailor touchpoints — like the first email they receive when they sign up for your newsletter, or what the user experience is like reading your blog — to their particular needs.

Want to get really nerdy about using data to improve customer retention? Here’s some in-depth information from Pointillist.

Want More?

There are plenty more strategies for customer retention — and I only just scratched the surface of these. If you haven’t read the previous post on leaky bucket strategies, you can find it here.

Want more ideas on customer acquisition? I’ve got posts on that here and here.

Are there any strategies that have worked really well for you? What are some you’d be interested in learning more about? Let me know in the comments!

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