Just got done with Retention: the most underrated growth channel on CXL.com, and thought of ways to use what I learned in that course in our social media strategy. The course was mainly about retention strategies for SaaS and the importance of retention on the whole. Lucky for you, I took some time out to figure out what are the best ways one could implement this on social media, especially for small and medium-sized businesses.
What is customer retention?
Customer retention is the ability of a business to engage existing customers and turn them into repeat buyers by stopping them from switching to your competitor. Many claim that it is 5-25 times cheaper to retain an existing customer than acquire a new one. A study done by Frederick Reichheld of Bain & Company concluded that increasing customer retention rates by 5% resulted in increased profits by 25% to 95%.
And because you do not have to invest in educating an already existing customer about your product/service, the probability of selling to an existing customer is 60%-70%. Whereas, the probability of selling to a new prospect is 5%-20%.
The average customer retention rate is below 20% for most industries and in the case of some sectors, the retention rate is over 25%. And with 72% of small businesses using a majority of their market budget on customer acquisition, you’re bound to make a much bigger impact just by planning out a customer retention strategy.
Implementing proper customer retention strategies can help you build solid relationships with customers, who then advocate for your brand through word of mouth. These loyal customers are also more forgiving (should something go wrong) and are more likely to spend more on your product/service than a new customer.
Although customer retention is cheaper than acquisition, it’s easier said than done. It takes a lot of blood, sweat, and tears to get customers to stay loyal to your business.
In this article, we are going to focus on using social media to stop your customers from leaving and/or jumping to your competition.
5 Easy and Effective Strategies To Improve Customer Retention With Social Media:
1. Social Listening As A Tool To Help With Customer Retention
If people are talking about your brand/business, you can guarantee that most of it are done on Social media. The process of understanding the online conversation about your company or brand, as well as your products and services, is called social listening. It's more than just stalking your customers on social media, it’s actively listening to understand what your customers are talking about, what they think and feel about your product/service, and what they need from your business.
When you invest your time to listen to your customers, it will be easier for you to implement strategies to retain them in terms of additional product/service features, improved customer support, etc
2. Prompt and Convenient Customer Support:
The most important channel for customer support for small businesses is their social media channels and there is no customer retention without good customer service. Social media gives us a platform to engage with customers in real-time. Customers knowing that, expect to receive a reply within 30mins, and if you take too long to respond to your customers, they will go away. (The worst thing you can do is leave them on read).
Engaging with your customers on social media helps decreases the chances of growing dissatisfaction, and it allows you to better manage your brand’s goodwill.
3. Build A Community
If your product/ service gives you an option of building an engaged community, then you should consider using social media to do so. For example, travel agents may use Facebook to create travel groups, where members can ask and answer questions relating to travel. If you’re a personal trainer, then a community/group to help its members stay consistent, share results, discuss diets and stretches, etc.
A client of mine that sells seeds and gardening tools, has a community for home growers where every day there are posts about new harvests and tips and tricks for growing and maintaining plants.
Being part of a group/community pushes people to stay ‘loyal’ to that group or community.
4. Share User Generated Content!
Showing off and appreciating user-generated content (UDC) will not only encourage users to create more content but will also make them feel valued by the brand. This small step will instantly turn them into advocates for your brand while also working as “Social proof” for new customers.
UGC also works amazingly in paid ads, where I’ve noticed low CPMs and high ROAS
5: Provide value/information through your social media accounts
Use your social media accounts to inform your customers about product updates, hacks, offers, etc to keep them involved and make it easier for them to find value in their purchase as well as repurchase.
Social media users are mainly on the platform to keep up with friends, family, celebrities, etc, only a handful would follow businesses, right? But yet you see pages like Redbull and Nike with thousands of followers – why? Because they sell more than just their brand. And your social media account shouldn’t just be about your business either, it should be about everything your brand stands for.
The more someone resonates with the brand, the more likely they are to stick with it.
Customer retention is super important, and as cxl.com states – it is one of the most underrated growth channels. Just by focusing some of your budgets on retention, you’re already doing more than most businesses. Leveraging social media can help improve customer retention, especially for small & medium businesses that are looking for cost-efficient always to do so.
About Retention: the most underrated growth channel – a course on CXL.com
The course is by Val Geisler, and it’s a 3-hour long course consisting of 6 parts. The course overall was very informative, however could be a little dry for someone not into SaaS. Would definitely recommend the course to understand customer retention, but in terms of application, you’re going to have to be creative and do your own research.
It’s a course to build a strong foundation. So if you’re someone looking for quick retention strategies that you can immediately deploy for your business, it might not be the one for you.