Customer Retention Strategies. Acquiring new customers is an excellent way to increase sales and revenue. However, retaining the existing customers plays a significant role in generating more revenue.
There is no point in acquiring new customers when you don’t have proper customer retention strategies in place.
According to Invesp, a 5% customer retention rate increases a company’s profits by 25%-95%. Also, the likelihood of selling to a first-time customer is 5-20%, compared 60-70% chances of selling to an existing customer. Moreover, selling to a new client is seven times more expensive than the one already on board.
All these facts lead us to one conclusion – Customer retention is critical for any business striving for success.
What Is Customer Retention?
Customer retention is the process of retaining customers over a period of time. As companies continue to grow, it becomes increasingly difficult to maintain their current customer base, resulting in an increased number of churned or lost customers.
You can give and extract value from your current customers by encouraging them to make repeat purchases with the right customer retention strategies.
Therefore, when you acquire new customers and convert them into loyal audiences, they become your brand ambassadors by default.
Why Is Customer Retention So Important?
Loyalty – Your existing customers have interacted with your product or service and know the value your business offers. Hence, they can spend more and keep returning more frequently than the new clients.
Affordability – It’s 5-25 times less expensive to retain an existing customer than to acquire a new one.
Referrals – Satisfied customers are great brand ambassadors. They are more likely to refer their colleagues, family, and friends, increasing the number of your customers with no extra cost.
Increased ROI – A 5% customer retention increase will increase your business revenue by 25-95%.
Valuable Feedback – You can win customers’ hearts by giving an outstanding customer experience. From their frequent purchases, you can identify areas that require improvement. By keenly attending to their feedback, you encourage them to stay.
Ideal Customer Retention Strategies That Work
These retention strategies can help you encourage your current customers to return and, as a result, boost your sales plus revenue.
1. Build A Positive Customer Experience
As your customers go on their buying journey, their experience and the services you offer are factors they consider when deciding whether to purchase at your business or not.
Hence, you should ensure that the process is as perfect as possible as customers will prioritize those who give them an easy buying experience.
You can also enhance your customer experience using smart customer communication tools such as Commbox, omnichannel customer communication and an automation platform that allows you to engage all customers on multiple digital channels in real-time, and provide a consistent, personalized experience across the customer journey.
2. Optional Customer Accounts
Customer accounts ease the buying process by giving existing customers direct access to pre-filled information and orders. But, to new customers, these accounts are burdensome.
For this reason, many will opt to sign in as guests if possible.
Therefore, you could provide a “create an account” option after a customer’s first order.
3. Surprise Discounts And Gifts
Everyone feels good whenever they are appreciated. You can express your appreciation to customers through surprise discounts and gifts such as branded promotional products.
Look out for the frequently bought items and offer discounts on such accompanied by a short engaging message from the customer service team.
Let your customers know that they are being rewarded for their loyalty, and offer them tempting incentives.
Also, you can create a VIP list and send your repeat customers VIP-only discounts. This makes such customers feel like an essential part of your business, which they are.
Alternatively, you can send your loyal customers gifts like birthday cards plus a voucher from your store on their special day.
These approaches encourage your customers to return and also raise your brand.
4. Have Proper Listening Skills
To eradicate churning issues in your business, be very attentive to your customers’ needs, complaints and experiences.
According to research done by Bain & Company on closing the delivery gap, companies believe they are providing a superior customer experience of 80%. In contrast, only 8% of customers think they’ve ever received an exceptional customer experience.
Therefore, to understand your customers’ experience with your business, ask them for feedback to improve your customer service.
5. Automate Your Customer Communication Process
Customers’ first impression determines the kind of relationship they will have with your brand in the days to come.
If their first impression is good, there is a high possibility of a return purchase and vice versa.
Therefore, you need to establish an ideal automated customer onboarding workflow to lay a firm foundation for excellent customer experience and the success of your business.
The process should be hands-on, personalized, and with minimal friction.
6. Have A Well-Built Employee Loyalty
Your employees’ loyalty is a major determining factor for customer retention rate.
Be sure to provide your employees with the necessary resources and tools like chat software, project management app and free desktop time tracker to perform their tasks professionally. In addition, recognize and reward every job well done to encourage a repeat action.
With a happy workforce, your customers will receive satisfying services and will feel compelled to keep coming back over and over again!
7. Give Back To Your Community
Customers nowadays are keener on how you relate to the outside world.
For that reason, your business should be actively involved in charity events, and your staff should participate in community involvement schemes.
Alternatively, you can go for a simple corporate social responsibility or write relevant blogs. And, if you’re thinking about creating your online community for your business, then these top 42 online community statistics will help you plan your online community better.
In short, you just have to be creative with your brand by giving it a human touch.
8. Use Personalized Interactions
Use the customer data available to you to improve their experience. Before you contact a customer, have basic details of the particular individual.
The tailored experience gives your customer a feeling of belonging and can associate with your brand smoothly.
Since your brand is more personal than just a business, tools such as Commbox can help you write more personalized messages. You will increase engagement, revenue plus the lifetime value of your customers.
9. Regularly Send Engaging Emails
Email marketing is the foundation of the retention toolkit and customer engagement.
Sending engaging emails to your customers more often gives you a chance to continuously build relationships with your customers before or after their initial purchase.
Even so, ensure that every email you send adds value to your recipient to avoid losing them in the long run.
10. Fulfill Your Follow-Up Promises
The ultimate indication of professionalism in business is keeping promises. The pre-arranged CRM software features allow you to plan for follow-up emails and calls in advance.
Alternatively, you can assign your team members these follow-up tasks to track your appointments and tasks you previously promised your customers.
Using Customer Retention Strategies To Boost The Growth Of Your Business
While acquiring new customers is essential for the growth of your business, retaining your existing ones is equally or even more important.
In a highly competitive business world, companies that keep their customers happy are very successful.
You should consider the customer retention strategies that best suit your business to ensure that your customers are delighted by your products or services.
That way, repeat purchases will lead to an increase in your revenue with minimal expenses.
