Customer retention is critical to the long term health of every business. Maintaining a stable customer base increases revenue and decreases costs. Incorporating video into your customer retention plan is one strategy that has proven benefits for both you and your customers.
Economics of Losing Customers
According to one study, repeat, loyal customers make up roughly 70% of all revenue for the average business. Furthermore, the cost of retaining a customer is usually roughly 1/5th the cost of obtaining a new customer. That is a remarkably good value to cost ratio.
What Makes You Lose Customers?
The main reason that businesses lose customers is because a customer has a bad interaction with that business. This could be a bad interaction with your staff, but more likely it is a bad interaction with your product.
Bad interactions don’t just happen because a product is poorly designed or has some kind of flaw. Many bad interactions occur because customers simply don’t fully understand how to best use the product for maximum value. Thus, it is critical that any customer retention plan involves customer outreach that helps customers get the most value from their product.
How to Incorporate Video into Customer Retention
Videos offer a simple and engaging way to show customers how to get the maximum value from your product. The best videos for supporting customer retention focus on the “hidden value” in your product. For example, you can make a video that shows how to use your product in an a way that most customers might not think to use it. This adds new life to your product. Similarly, a video that shows precisely how your customer can save money using your product and details exactly how big those savings are, will increase the perceived value of your product. Both approaches create a positive interaction and increase the likelihood of retaining a customer.
Long Term Benefits of Customer Loyalty
Customer loyalty has cascading benefits. Many people are likely to switch brands when they see others leaving that brand. Similarly, when people are remaining loyal to your brand, you benefit from word of mouth advertising and may find your customer base expanding. This means that your videos aren’t just influencing the customer that watched them. They also have influence on customers and potential customers who didn’t, increasing the value of this tool on your revenue.