The Ultimate Guide to Growing (& Keeping!) Your Customer Base
How much is your customer base worth? Its value depends on how your service makes your customer base feel – an aspect that can affect your entire business. But what is your customer base, and why is it so important?
Your customer base is made up of customers who repeatedly purchase your products or services.
It can also be useful to distinguish between your customer base and your installed base. The main difference is that your installed base is currently using your product or service. The installed base also includes customers who have recently purchased your product and/or service. On the other hand, your customers base is larger and includes both your installed base as well as customers who are not currently using your product and/or service.
Why is your customer base important?
Your customer base offers repeat business, so they add valuable resources of revenue and word-of-mouth marketing for your organization. Repeat customers spend more and it is easier to sell new products to them because they know, like, and respect the quality of your products and/or services.
You should not neglect repeat business. Your company cannot acquire an infinite number of customers. So, your customer retention strategies should focus on both your customer base and your installed base to get the most out of your best source of revenue: recurring revenue from repeat business. And finally, for continued business growth, your business model should bring in new customers and support recurring business.
In addition, HubSpot Research indicates that 49% of customers shared both negative and positive experiences on social media. With this in mind, you should remember that social media is the 21st century’s word-of-mouth advertising.
This HubSpot data also highlights the importance of how your business makes your customer base feel. If nearly half your customer base is sharing their experiences online, then your goal should be to make them feel important and appreciated. Offering positive and memorable service experiences will inevitably result in higher customer retention and customer acquisition rates.
Strategies to grow your customer base
1. Differentiate your customer experience
Customer experience can be defined as each customer’s overall opinion and feeling regarding your business. These impressions are based on every encounter that they have had with your brand. Whether you choose to surprise your customer base with free content, discounts or extra perks, make customer experience your competitive advantage. This can be the unique selling point that puts you ahead of the competition.
Improve customer service
It sounds simple, but many businesses just don’t invest enough time or money into making sure that their customer base receives high-quality customer service. Customer service that goes above and beyond expectations is important because each encounter with your business can help you to outshine your competitors and keep your customer base coming back for more. Research conducted by Microsoft indicates that under two-thirds of 5000 respondents (from Brazil, Germany, Japan, the UK, and the US) took their business elsewhere after only one substandard customer service experience. Furthermore, as customer strategy consultancy ThinkJar reported, 66% of customers changed brands due to inferior customer service.
If applied to your business, this means that poor customer service could cost you almost two-thirds of your customer base and consequently two-thirds of your revenue. This potential loss can easily be avoided through proper customer service training. Investing time and resources into recruitment and training will also improve your team’s success and efficiency in the long term. As a result, you’ll be able to monitor and continuously improve your team’s performance and attitude toward your customer base from the very beginning.
You can differentiate your customer experience through customer loyalty programs, enhanced web accessibility, and customer success programs.
- Customer loyalty programs can make your customer base feel appreciated as they will be getting something in return for their business. Everybody loves a bonus!
- Enhanced web accessibility adds to your inclusivity, which is not something to overlook in today’s diverse societies. You should optimize your website for all users to accommodate vision or hearing impairments, or learning, cognitive or physical disabilities. This will help you to expand your customer base and improve your overall brand image.
- Introducing and utilizing customer success programs can preserve and nurture your customer base. Customer service teams react to your customers’ complaints and feedback, but customer success programs are proactive. They monitor customers and proactively intervene before issues become serious.
2. Grow your customer base through customer advocacy
Before the Internet, customer advocacy was simply word-of-mouth advertising. Your customer base had a much smaller audience and reach. Today, anyone with access to the Internet can read customer testimonials and reviews. You should encourage your customers to write and share their feedback online, especially if you are providing your customers base with positive experiences. In fact, research conducted by BrightLocal (an integrated SEO and local citation platform) revealed that:
- 87% of customers used online reviews when considering local businesses
- Positive reviews increased the likelihood of 82% of customers buying a product or service
- 79% of customers trust online reviews as much as they trust recommendations from people they know.
Furthermore, almost three-quarters of your customers will share their positive experiences with at least six people in their network. These figures clearly emphasize the importance and power of positive customer reviews.
An easy and effective way to increase word-of-mouth advertising is to use an incentive program. The incentive program can offer rewards for referrals and provide tangible benefits for your customers base.
3. Actively listen to your customers
Active listening is a key component of high-quality customer service that involves giving the customer your full attention. You should make every effort to understand the customer and respond to their needs. These same principles can be put into practice when reacting to customer feedback. Active listening will help your customers feel heard, which will likely result in further brand advocacy.
Listen to customer feedback
An essential part of excellent service is listening to what your customers are saying. Customer feedback can be gathered in various ways including:
- Post-service feedback
- Post-purchase feedback
- Customer service chat
- Social media interactions
- Phone conversations
- In-person feedback
Being an active listener means giving the customer your full attention and focusing on their needs and the solution. You should aim to understand the customer’s perspective in order to understand their feedback and provide appropriate support.
Respond by taking action
Active listening requires you to both listen and take appropriate action. Meeting and exceeding your customers’ expectations should be your main priority. As Bill Gates noted, “Your most unhappy customers are your greatest source of learning.” However, integrating positive feedback into all areas of your customer service is equally important. Actively listening and responding to positive feedback will provide you with many opportunities to identify and work out which factors influence your customer retention. These factors should be included in your standard operating procedures (SOPs) to improve customer retention and further grow your customer base.
- Your customers provide repeat business and should be nurtured.
- Differentiate your customer experience in order to maintain and grow your number of customers.
- You can stand out from your competition using customer-centric service, customer loyalty or reward programs, enhanced web accessibility, and customer success programs.
- Use customer advocacy and word-of-mouth marketing to grow your customer base.
- Actively listen and respond to your customers’ feedback to expand your customer base, increase customer retention, and boost customer advocacy.
CustomersFirst Academy offers comprehensive customer service training designed to help you grow your skills and advance your career.
To keep learning and developing your knowledge of customer service, we highly recommend the additional resources below: