What I'll Learn
- What is Customer Retention?
- Why is Customer Retention Important?
- 7 Effective Customer Retention Strategies
- FAQs: Customer Retention
- 1. How to generate more customers?
- 2. What to say to retain customers?
- 3. Is it better to acquire new customers or to retain existing ones?
- 4. How does CRM help retain existing customers?
- Wrapping Up: Customer Retention Strategies
- Read Next
Have you ever wondered why gigantic companies emphasise the customer retention approach; and adapt customer retention strategies accordingly?
Customers are the assets for a business, and the last thing a business would want is to lose its customers. You must retain your customers, especially those ready to leave, to reach your targeted business goals.
What is Customer Retention?
Customer Retention is the ability of a business or company to retain its customer over a specific time. Old customers keep coming back to you as a sign of good fortune.
If you fail to satisfy your customer’s needs, they are likely to leave your service and might incline towards your competitor’s services and product.
Most companies and service providers focus on increasing revenue and generating more leads when their business starts growing quickly. This results in hurting their already existing customers.
Now, we all know that one would want to keep his existing clients. The actual question is, how do you attract and retain customers who are leaving?
Here’s the deal! You have to invest the same amount of energy and resources in retaining existing customers as you generate new ones.
Why is Customer Retention Important?
Give your customers good reasons to stay. If you succeed in retaining existing customers, new ones will come automatically.
Studies have shown, generating new leads into customers costs you more than retaining old ones. Harvard Research Study shows companies earn profit by 25% to 95% only by a 5% increase in customer retention rates.
Business success depends on a high customer retention rate and low churn rate. A business can easily attract and ultimately level up the game by implementing the right strategies for client retention.
To simplify the process and provide you with an actionable plan, we have seven super effective strategies to help you seamlessly retain and repeat your customers.
7 Effective Customer Retention Strategies
1. Build Loyalty to Retain Customers
Industry-leading companies design their framework around the requirement of their customers. It’s not just about answering their queries but a whole process of trust communication and road map to building a long-term relationship, which creates loyalty between you and your customer.
Businesses and companies that deliver around customer needs at the top of their industries can grow revenues roughly 2.5 times faster than their competitors.
Loyalty can go a long way. When you treat your customers well and provide them with solutions to their problems on time, they will not only trust you but will rely on you and your customer service. Companies that put their customer value first generate more profit and achieve their company goals faster – client retention done successfully!
2. Surprise and Gift Vouchers
Who doesn’t appreciate gifts? Little gesture like a surprise, discount, gift vouchers goes straight to the heart of your customer. Even a simple handwritten note can make them feel special. Pamper your VIP regular customer, who adds value to your company.
Increase the retention rate by incentives such as loyalty programs, freebies, discounts, and special offers. Reward them from time to time. This also makes your customer happy and satisfied with his decision to spend his hard earn money in your business, and that’s your ultimate goal.
Come up with creative ideas. Going the extra mile to make your customer happy increases the value and goodwill of your brand.
3. Tackle Churning Signs in Advance
Customers run away when they aren’t served well and have a poor CX (customer experience). According to Harvard Lecturer Avery, “Churn rate is a metric that measures the percentage of customers who end their relationship with a company in a particular period.”
In simpler words, the number of clients who leave your services and shift their loyalty to attain your competitor’s service because of some bad experience with your company.
Finding the root problem is important to solve the problem which causes your customer to leave. This results in decreasing retention rate eventually. It is problematic for your company to have a higher churn rate than a customer retention rate.
If your business is evidencing a likewise situation, then you are doing something seriously wrong. Calculate your churn rate and analyse the reasons to get ahead of losing your customer.
4. Follow up Emails & Surveys
The best strategy to retain customers is by measuring the interest of your target audience and managing them accordingly. This is done by sending emails and newsletters from time to time.
According to Nielsen Norman Group, “Newsletters are great for growing or maintaining relationships, even during times when people aren’t actively making purchasing decisions.”
Another effective strategy for this purpose is using surveys. Surveys are such an actionable strategy. You can find out more about your regular customers and clients who show interest in your business.
People want to speak their heart out on what are they expecting from you and your brand. Educate them about your product. You have to value their opinion that ultimately makes them stay hence an increase in retention rate.
5. Over-Deliver on Your Promises
You can’t attain customer retention marketing if you don’t over-deliver on your promises. Set expectations early and often. Find the pain point of your client and serve them accordingly.
“Formula for success: under promise and over deliver.”– Thomas J Peters
If you promise something, then deliver on time. Companies earn loyalty and customer satisfaction when they deliver on time and show them that you care. It puts such a bizarre impression if you make a promise and don’t fulfil it even after months have gone by, then the customer can easily become upset.
Measure the unsaid expectations of your customer by making use of surveys and follow-up emails. Fulfilling their demands before they even ask can gear up your customer retention.
6. Create a Roadmap for Future Relationship
Be transparent with your day-to-day activities and share your progress with customers. This way, customers can drive an idea of where they stand in the picture and have value. Here is when the customer’s lifetime value comes into play.
Build long-term relationships rather than one-time deal offers. Identify your potential customers who add value to your company. Always ask them what they are anticipating for future projects.
Design your customer retention strategy to organise the business at the centre of your customer needs. Equip customers with the knowledge & skills they need to make the most out of your product or service.
7. Record Feedback
Always track, record, learn from your customer’s feedback. Satisfied and happy customers share their good experiences with their friends and family hence more clients free of cost.
Over 88% of customers buy your products by incorporating past client’s feedback.
Feedbacks are also important to know the reason behind the churn rate, what needs to be changed in the strategy, and customer service.
Don’t hesitate and run away from negative feedback. Negative feedback helps you in correcting your mistakes and level up your strategy. If you don’t even know the root cause of why your churn rate has increased over time, you can’t come up with the best solution to increase the customer retention rate.
FAQs: Customer Retention
1. How to generate more customers?
The general rule of thumb is to give value to your customers in every aspect. Always prioritise your customers, whether it’s a product, service, customer support, or anything else. Additionally, ask for referrals, invest in marketing and advertising, offer discounts, sales, and pay attention to customer experience.
2. What to say to retain customers?
Follow the 7 Cs of communication while trying to get success in customer retention. Offer exceptional customer support, and persuade the client to stay with your business. You may also offer incentives to retain your potential customers.
3. Is it better to acquire new customers or to retain existing ones?
Acquiring a customer will likely cost you 5X more than spending on customer retention. Additionally, you only get a 5 to 20% improvement score when you take a new client on board. Conversely, a 5% improvement in customer retention increases profits by 25-95%.
4. How does CRM help retain existing customers?
CRM allows you to store all the information about your customers. Hence, using CRM, your content and conversations are tailored to match the interests of your customers. By doing so, you can upsell to your current customers more easily.
Wrapping Up: Customer Retention Strategies
So—that was all about it! The simplest yet effective customer retention strategies are to keep the customers who are leaving. These tactics will assist you in keeping your customers satisfied, increase their value proposition, and solve their problems. So much so that even if they are presented with new options, they choose your brand. Happy customers become the advocate of your brand and sing your company praise in front of friends and family. As a result, they bring more customers.
Careful application of the killer strategies above-mentioned will make your customer coming back to you and your offers. Now that the missing piece of what causes client retention has fallen into place, you are ready to boost your customer retention rate.
Share the customer retention strategies that work best for your business in terms of retention marketing.