When figuring out the value of a lead (as we did in our earlier blog post), customer acquisition becomes just half of the customer value equation.
The numbers may show that you should spend just $500 to make $10,000, but there are other important ways to value customers that don’t boil down to cold, hard math. Consider this:
- What’s it worth to you to have customers refer your business to a friend or family member?
- How much is an online review worth to the reputation of your business?
- What are you doing to capture value AFTER a sale or completed job?
A Bain and Company study showed that when you improve your customer retention rate by just five percent, you can increase profits by more than 25%. Simply put: when customers return to your business, they buy more over time, thus increasing their lifetime value.
A 5% improvement in retention can lead to a 25% increase in profit.
With numbers like that, the value of sustained outreach and other retention strategies like customer reviews and referrals becomes clear. As you look for ways to communicate with customers, address their concerns, and keep them coming back for repeat business, these strategies are worthy of your time and consideration.
These strategies are often ignored because they feel like “extra work.” It’s been shown time and again that people heavily rely on reviews—especially from strangers online—as well as word of mouth when looking for home improvement services. How much revenue have you missed out on by not asking for reviews and referrals?
Generating referrals and online reviews doesn’t have to be hard (or expensive). There are plenty of tools out there to help you build your online reputation, manage reviews, and create new referrals that draw in customers.
Reputation management software is prevalent, easy to use, and relatively cheap (compared to what you’d lose by letting your follow-up lapse).
These software programs not only help you manage and respond to reviews quickly but they also provide the added benefit of identifying potential customer issues by highlighting the keywords that are often associated with negative reviews. Pinpointing issues, gripes, or just plain negative reviews goes a long way in building your reputation and trust—two key factors in whether people choose to do business with you.
“85% of consumers have as much confidence in online reviews as they do in personal recommendations.”
– Business 2 Community Blog, 2017
If you’re not using reputation management or reviews software, your digital marketing ROI is needlessly suffering.
Showing your customers (and anyone else who sees it online) that you’re listening—and, in turn, thoughtfully responding to praise and detractors—will go a long way in helping you keep some of the money that’s been left on the table.
This post is an excerpt from our ebook “Don’t Stop at the Top: How to Create the Right Marketing Mix for Measurable ROI.” You can get your copy here.
Ready to turn more customers into repeat business? Talk to a Socius representative and we’ll help you out.
