The best way to increase your customer retention numbers is by creating a strategic customer retention program that will allow you to turn your students into loyal customers of your business. According to data from Harvard Business School, increasing customer retention by 5% can lead to a whopping 25-95% increase in profits. But how exactly do you do this? We’ll walk you through everything you need to create a winning customer retention program below.
Defining your customer retention program
Simply put: A customer retention program is a business strategy that helps businesses create returning customers. It encompasses many different marketing strategies—from email marketing to social media campaigns. The goal of all those marketing strategies is always to retain current customers. And ultimately, you want to make sure they keep buying from you.
Benefits to an online course business
There are three reasons why an effective customer retention program is crucial for your online course business success.
1. Customer retention program helps create superfans
The key to long-term success for your online course business lies in creating superfans of your brand. Superfans are those who return and buy your products. They’re also those who rave about you and your brand to everyone around them. In his book “Superfans”, online course creator and marketing expert Pat Flynn writes:
“People don’t become superfans the moment they find you. They become superfans because of the magical moments you create for them over time.”
And, your customer retention program is going to be the key to creating those magical moments Pat Flynn mentions. It will be what turn your customers into your brand’s superfans.
2. Customer retention is cheaper than customer acquisition
Data shows that acquiring new customers can cost up to five times more than retaining existing ones. For online businesses with smaller budgets, the difference in cost can sometimes make or break long-term business success.
3. It’s easier to sell to existing customers
What’s more, a customer retention program will help you make sure that you have a large pool of returning customers. Again, data shows the opportunity to sell to existing customers is 60-70%. On the other hand, you only have a 5 to 20% chance of selling to a new customer.
As an online course creator, you may be creating new online courses periodically. It will be so much easier to launch a new course when you already have a cohort who has tried your courses before and may be ready to buy more.
7-step process to create an effective customer retention program
Step 1: Calculate your metrics
The first step in creating your customer retention program will be your business assessment. You have to know where your business is right now to create a roadmap to get you where you want to be. Here are the most important metrics you want to track:
- Customer retention rate: This metric allows you to see how many repeat customers your business gets.
- Customer churn rate: This metric indicates the number of customers who stopped interacting with your business at any given time.
- Repeat purchase ratio: This metric allows you to track the percentage of customers who return to purchase from you at any given time.
- Customer lifetime value: This metric shows how much revenue a single customer generated for your business.
Creating a spreadsheet can help you track and calculate these metrics as you move forward with your customer retention program. It will allow you to track results and see which promotions bring in the best results.
Step 2: Create an online survey and ask for feedback
People want to be heard and feel like their feelings and opinions matter. The best way to get customer is through online surveys. Ask your students for feedback on your course material and products. Remember to be open to any constructive criticism they might have.
Consider using Google Forms, which are free and easy to use. Then send out regular surveys to your email list to ask for feedback on existing products. You can even go as far as asking your customers for input on any future product ideas you have for your business.
Step 3: Create an engaging and valuable newsletter
Email marketing is the best way to keep in touch with your past and current students. The same data from Invesp shows email marketing is the best marketing strategy to improve your customer retention. So, focus on creating an engaging and valuable newsletter for your email list.
Check out these articles to find out how to write an effective email, how to craft smart email subject lines that get clicks, and how to avoid your newsletter going to the Spam folder.
Step 4: Create a loyalty or referral program
Chances are, your students will appreciate a special offer or reward for their loyalty. Offer incentives such special discounts for people who join your email list. Run giveaways and offer valuable freebies that your audience finds useful from time to time.
You can even go as far as creating a student referral program where you give discounts and special offers for those customers who bring friends to your business. An invitation to an exclusive group where they get access to Q&A sessions or monthly lives with you can be a great way to reward your current customers.
Step 5: Automate your business communications
Automation is one of the best things you can do for your business as an online course creator. Create an onboarding sequence for your email list and once it’s all up and running – automate it. This way, you’re going to acquire new email list subscribers without having to lift a finger.
The same goes for your newsletters and other parts of email marketing. Automate as much of your process as possible so that you can focus on other parts of your business. All email software providers from MailerLite to CoverKit have easy-to-use automation tools that will take you little to no time to master using.
Also, don’t forget the customer service! Set up automated replies that let people who contact customer support know that their email was received and that you’ll get back to them in a set time frame. Your customers will appreciate small details like that, and all of it will ensure that they’re returning for more in the future.
Step 6: Improve your customer service
Customer service is one of the most important parts of your business. And it’s crucial for effective customer retention. American Express found that even 33% of people would consider switching to a different business immediately after a bad customer service experience. So, as a small business owner, you do have only one chance to leave a good impression with your customer service.
As we already went over in Step 5, setting up automation systems for effective customer service is a good place to start. When dealing with your students who have issues, always be polite and ready to help them solve whatever issue they might have.
Step 7: Create a community
One of the best ways to create superfans for your business is by building relationships with your customers. So, the last strategy in your customer retention program you’ll want to implement will be creating a community. Pat Flynn explains the importance of the community in his book extremely well:
“This [community] is where a majority of your comments, feedback, and survey results will come from, and when it comes to creating anything new, the community becomes an essential asset for seeding and validating new ideas that can help the business excel and grow. And it’s from this community that you build your brand’s superfans.”
Your community will not only cultivate returning customers and fans of your brand, but it can also help you improve your business from the inside. So, take advantage of all the benefits that the community has to offer and start one as soon as possible.
Facebook has the Group feature that allows you to easily set up a private group where you can invite people or allow them to join. You can also schedule lives there and post engaging content and allow community members to communicate there as well.
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