How to build your customer base sustainably
Kelli Trapnell
·November 8, 2023
For online business owners, the challenges of building a customer base have grown in recent years. A decade ago, online advertising was cheap and effective—but the costs of digital marketing have jumped dramatically. In the last year alone, Facebook advertising costs jumped by 61%, going up to $17.60 CPM (cost per thousand ad views).
These kinds of customer acquisition costs aren’t sustainable for the majority of small businesses, so it’s important to look for ways to grow your customer base that don’t rely on heavy ad spending, so that you can boost your profits as you grow your audience.
In this article, we’ll look at:
- Organic and low-cost marketing strategies for building a customer base
- Focusing on strong customer relationships for higher retention rates
- Optimizing returns to increase your customer lifetime value
Organic and low-cost marketing strategies for building a customer base
As we’ve established, relying on heavy digital ad spending isn’t a sustainable marketing strategy for scaling your customer base. So what are your alternatives?
Don’t rule out advertising altogether—as a new business, it can be an important way to expand your reach. But if you do, make sure that you’ve built a clear marketing funnel that will help you re-target customers without paying for additional ads. For instance, use your marketing campaigns to promote a special promotional discount that new customers will get for signing up for your email marketing list. You’ll then be able to effectively communicate with these customers without paying to reach them again, using personalized marketing messages that are customized to their browsing behavior.
Social media is also an effective method for reaching and growing your customer base. By using relevant hashtags, offering giveaways, and collaborating with influencers, you’ll be able to connect with new audience members who meet your target demographics. Growing an audience through organic social media requires some time investment, but the financial cost is far lower than traditional ad spend.
Content marketing is also a highly effective strategy for reaching your ideal customer, by crafting content that connects with their pain points and offers valuable insights that they can use. The content need not be focused on your product itself, but it should help your target audience understand why a product like yours may be valuable. Content marketing assets can come in the form of blog content, videos, podcasts, and other media, and can be shared to social media as well. For instance, if you sell a line of organic styling cream, a video series focusing on hairstyle tutorials that incorporate your products can help you grow your audience across video platforms including YouTube, Instagram, and TikTok.
Once you have a core customer base, building a referral program can be an excellent way to grow your business via word-of-mouth marketing. Customers who reach you through a referral have already heard good things about your product from someone they trust, and are more likely to build a long-term connection than customers who come in through other forms of marketing. Make sure to offer valuable incentives for customers to refer their friends, such as offering a discount code for both the referrer and referee.
Focusing on strong customer relationships for higher retention rates
To build a sustainable customer base, it’s also important to look at your customer retention and churn rates. “Churn” refers to customers who stop shopping with your brand—and so it’s important to find ways to identify the customers who are at risk of churn, and re-engage them before it’s too late.
You can use your CRM and other marketing analytics tools to segment your customer base by their behavior and demographics, and identify those who show signs that they’re likely to churn, such as not opening a marketing email in the past month. You can offer incentives such as a one-time deep-discount promotion to lure them back into your marketing funnel, boosting your customer retention rates.
Great customer support is also crucial for keeping your existing customers happy. Make sure that you provide excellent customer service across a variety of channels, such as live chat, phone, and SMS support, where customers can resolve their questions quickly. It can also be helpful to offer self-service options where possible, enabling customers to solve their own problems without waiting for a customer support agent.
To further incentivize your existing customers to stick around, build a customer loyalty program. By giving your customers the chance to collect points that can be redeemed for various rewards or discounts, you’ll be able to encourage current customers to shop with your brand more frequently and increase their lifetime value.
Optimizing returns to increase your customer lifetime value
Finally, don’t neglect the post-purchase experience as an opportunity to increase your customer retention and lifetime value, through transforming the returns process.
Using a returns management solution like Loop, your brand can optimize the returns experience to prioritize exchanges, or even upsells, over refunds, helping your brand retain more revenue from each transaction. By facilitating a smooth, self-service ecommerce returns experience, customers can send back the products they don’t want, and replace them with the ones they do—giving them another opportunity for your brand to win them over. Loop makes exchanges easy, whether the customer is replacing a size that doesn’t fit for one that does, or going back to your store to find a completely new item that will be a better fit for their needs.
It costs about five times more to acquire a new customer than it does to keep an existing customer, so building a marketing strategy focused on customer retention is crucial to growing a sustainable customer base.
Want to see how Loop can help you? Get in touch for a demo today.
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