Customer retention is an essential element for growth and long-term profits for any business. In order to stay relevant and ensure customer satisfaction, it’s essential to constantly optimize and update your customer retention strategies. Everything from campaigns to improving your omnichannel strategy can help you boost customer retention and increase trust and loyalty.
It is common for business leaders to think that a great product or service is enough for customer retention. However, this is only a short term strategy. The hard truth is that eventually your customers will feel that you don’t care about them which will push them to leave.
The key is to continuously earn their loyalty. Therefore, having an effective retention program gives you the ability to identify, track and sell more to these customers who are most likely to become your long-term sources of income. According to a survey by KPMG, customer retention is the biggest revenue driver for a company’s revenue growth in the next 1-3 years.
Numerous statistics have shown the importance of customer retention:
- Based on a report by Bain and Company, a 5% increase in customer retention can increase a company’s profitability by 75%.
- Besides, according to Gartner Group, 80% of your company’s future revenue will come from just 20% of your existing customers.
- More statistics by Marketing Metrics highlight that it’s easier to (about 50% easier) sell to existing customers than to brand new prospects.
- The most interesting statistics by Bain and Company also report that attracting new customers will cost your company 6-7 times more than keeping an existing customer.
So what are the best strategies for customer retention?
Emphasize on customer experience
You can invest in low-cost initiatives to delight your customers and build loyalty. For instance: creating an omnichannel experience for your customers can be highly beneficial. This will allow them to have a seamless and personalized experience no matter the channel they choose to interact with. Another tip is to find milestones in the customer relationship and find ways to reward customers when they least expect it. For example, a customer orders their third pair of trousers from your company. A good way to reward them is by sending a belt with a handwritten note thanking them for their business. Using such unexpected displays of appreciation could go a long way to improve customer experience.
Improve Customer Service
Businesses need both customer retention marketing as well as an outstanding customer service experience to be successful. A study by the Gallup Group highlights that customers who experience a “courteous, willing, and helpful” service were nine times more likely to be engaged with a brand. Moreover, “Gallup has noted that enduring relationships result only when companies pay attention to meeting the important emotional needs of their customers. And these needs aren’t met by faster service but by better service.” Business leaders should remember that 68% of customers leave because they are unhappy with the service they receive.
Various studies have shown that strong service levels can have an important payoff in retention, and thus in long-term profits. More intriguing findings show that a customer whose problem was identified and resolved has been shown to indicate a stronger intention to repurchase than a customer who never encountered a problem in the first place.
Build customer advocacy
Basically, your most loyal customers are a highly powerful tool when it comes to acquisition. It’s important to take advantage of this by encouraging them to share on social platforms, speak at events or contribute to content. Hence, by building a community with your customers, you’re not only keeping your existing buyers engaged, but also giving potential buyers good reason to take notice of your services/products.
Provide Real Value
It’s important to focus on the value your business provides. The point to remember is that value does not mean having the lowest price, but instead indicates that the experience is good for the customer and the business.
In fact, value is about surpassing customers’ expectations from their initial contact with your company through the buying process and beyond. For example: you can build your website in a way that offers the easiest interface or you can include free tech support for the product. Customers will definitely appreciate such gestures and may even pay more for your goods or services because of it.
Approach Negative Reviews in a professional way
It is certain that at some point of time, your business might get a negative review. It doesn’t matter how dedicated you are to making every sale an effortless transaction, mistakes and misunderstandings can still occur. Sometimes, customers will have legitimate complaints, while others may seem unreasonable. Either way, it is important to remember that public reviews can be seen by other customers or potential clients.
2014 Local Consumer Review Survey by Brightlocal reports that 72% of respondents say that positive reviews make them more likely to trust a local business. In fact, 88% of consumers said they trust online reviews as much as personal recommendations.
Hence, it is crucial that business owners respond to reviews in a professional manner. For instance: Apologize for the inconvenience, fix the issue, re-iterate your brand’s/company’s commitment to customer satisfaction and finally contact the customer to follow-up. This will encourage others who come across the conversation online to recognize that you made an attempt to address their concerns.
Customer retention represents an important source of profits. By aiming to provide ongoing value to customers, excellent customer experience and service, business leaders are sure to retain maximum clienteles. In order to achieve such results, the effort should start internally by providing an engaging training and development program to employees. This will enable growth and ensure productivity across all departments.