Traditionally, small business owners look to marketing to generate new business for their company to continue to grow revenue. Still, there is a significant opportunity to do that without bringing a single new customer onboard. Customer retention and upselling are often overlooked in small business marketing plans but should be a substantial role in any marketing effort you undertake. If your marketing plan doesn’t include retaining and upselling existing clients, learn why it needs to and how to add it to your marketing efforts today for more revenue tomorrow.
What is client retention?
Client retention or customer retention refers to the ability of a company to retain its customers over some specified period. Depending on what the company sells, it could be renewal or retention of services or simply repeat customers buying the same products. High customer retention means customers of the product or service tend to return to, continue to purchase or, in some other way, not stop doing business with a company.
What is upselling?
According to Shopify, upselling is a technique used to get a customer to spend more by buying an upgraded or premium version of what’s being purchased. Related to upselling techniques is cross-selling, which involves offering the customer a related product or service.
Why your marketing needs to include retaining and upselling messaging
The basic fact is this: there are only three ways to bring in sales to your company:
- Find new clients
- Sell more to each client you already have
- Retain existing clients
While your small business should always focus on all three, the second and third bullets above may be easier to accomplish, especially during economically challenging times. First, there is the economics of obtaining new customers versus keeping and/or upselling the ones you already have. Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one, according to Harvard Business Review. Here are a few more interesting facts based on the HBR article:
- Increasing customer retention rates by 5% increase profits by 25% to 95%.
- With customer retention, you don’t have to spend time and resources going out and finding a new client; you just have to keep the one you have happy.
How can you weave customer retention and upselling into your marketing efforts?
There are several ways that you can market to your existing customers to retain their loyalty.
Create content that helps your existing clients
We talk a LOT about the value of content marketing for small businesses. The challenge is that many companies large and small assume that the content they create should help attract new customers, but it really should include content to support existing customers as well. Consider these content examples that can help your existing clients:
- Product how-to articles, videos, and checklists
- Content to help customers get the most value out of your product or service
- Introduction to new product or service features and benefits
- Create content that showcases upgraded features of products or services
Launch a referral program
It’s surprising how few businesses adopt an effective referral program, yet it’s one of the best ways to grow your small business. The power of referrals for small business owners can’t be understated! Consider this:
- They don’t cost anything – it doesn’t cost anything to ask for referrals (though we suggest rewarding the referrer; more on that later).
- You’ll increase your closing ratio – “warm” leads close at a higher ratio than cold ones. A referred business will be more open to working with you than someone who found you online.
- You’ll make more substantial sales – there is a level of trust established when someone is referred. That can lead to a larger purchase.
- Referrals bring in more referrals – if those who are referred to you do business with you and are happy, they’ll refer others.
If you aren’t actively marketing a referral program for your small business, now is the time.
Create a customer-only section on your website
You may already be engaging in effective content marketing, providing great content with useful tips and tactics your prospects can use, therefore seeing your company as a subject matter expert. Why not take that effort a step further and create a customer-only section on your site that provides your current customers with more value? Create a library of higher-level case studies, tools, etc. that provide additional value to being a dedicated and loyal client to your small business. Market this exclusive VIP access to content to your existing clients to show the value of being a customer. This is a great way to support retaining and upselling existing clients while adding value.
Offer customer-only discounts, early sales and upsells
Almost every company that offers any kind of discount, coupon, etc. does so with the intent of attracting new customers, some going as far as to offer the best pricing to new customers, and excluding existing clients from taking advantage of great deals, but perhaps we’ve gotten this model backward the whole time. Here’s why offering discounts and coupons to existing customers is a good idea:
- Offering discounts to loyal customers makes them feel appreciated. It’s a great customer retention tool.
- This is a great way to introduce new product lines to your loyal customers and make it easier for them to try it (upselling/cross-selling)
- Offering discounts through a loyalty program is a great way to collect important information about your loyal customers, such as their buying habits).
- Offering discounts can be a good way of getting customers that haven’t purchase in a while to consider buying from your business again (re-engagement)
While no company should stop trying to acquire new business, make sure your marketing plan also includes retaining and upselling existing clients to continue growing revenue.
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- How Small Businesses Benefit from Referrals - November 6, 2023
