Customers act as the fuel to drive your business forward. When treated correctly they can be a renewable resource. This is because a satisfied client doesn’t simply finalize a purchase and then move on, but they return again and again, supporting their favourite brands for the years to come.
In fact, customers are your most valuable assets, as they are dynamic and ongoing with significant potential for growth. So, whether it is focusing on traditional retail or eCommerce or B2B technology, or anything else, a smart business knows what strategies to follow for retaining their current customers.
The importance of customer retention cannot be undermined as research points to the fact that it costs 5 times more to acquire a customer than to retain and enrich existing customers. This makes sense as the most expensive, time-consuming, and difficult task associated with customer acquisition have already been completed. And you have already jumped the biggest hurdle guiding your lead across the finish line to finalize the first sale.
There are other interesting statistics that signify the importance of customer retention:
- Increasing customer retention rates by 5% can lead to an increase in profits by 25% to 95%.
- The likelihood of converting a new lead to a customer is around 5 to 20% whereas converting an existing customer into repeat customer is 60 to 70%.
Of course, it’s easy to make a note of the significance of customer retention; it’s harder to actually retain customers. For that, your company needs to develop an effective customer retention strategy. Incorporating customer retention best practices will not only help you increase the customer retention rates dramatically but at the same time will help you maintain a competitive edge in your respective market.
Some of the most popular tips that can set you on the right path are:
Customers must know what to expect
It’s best to under-promise and over-deliver to your customers at the beginning of the relationship. Ensure they know what they are getting from your product and services and what they can expect, especially if they have been doing business with your company for some time. You may need to capture your customer’s attention in order to close the sale. However, make it a point to be as realistic as possible and then do your best to outperform their expectation. This will drive brand loyalty and when the customers feel they can trust you, they will keep coming back for more.
Also, remember that customers often recall negatives before positives. So, avoid unmet expectations and unpleasant experiences at all costs. Even if you make it right nine times and miss out once, that one mistake can be enough for a customer to leave.
Provide next-level customer service
Eight out of ten customers are keen to spend more to deliver a better customer experience. A positive correlation exists between investment in digital customer experience initiatives and customer satisfaction and willingness to spend more.
The customers don’t like to wait for days to get their issue resolved. In fact, as per Forrester research, 73% of customers say that valuing their time is the most important thing a company can do to deliver superior customer experience.
To accomplish this you can offer omni-channel customer support across various channels such as phone, email, live chat, social and more. Customer retention rates can be improved by improving customer service. You can align your KPIs (key performance indicators) around customer service and your customers’ goals.
Leverage customer feedback surveys
It may be hard to improve your business if you don’t know how your customers feel about it. It’s vital to have a process to obtain customer feedback and share that information with the rest of your organization. Customer feedback loop presents a system to collect, analyse, and distribute customer surveys and reviews.
Most commonly used method for collecting customer feedback is the Net Promoter Score survey, or you can ask the customers to participate in focus groups or user testing. You can use one or few of these methods on a regular basis to capture relevant and ample customer feedback.
Online customer surveys can help you understand your customers’ challenges and pain points. Leverage customer surveys to gain insights into where you can improve to empower your customers to work smarter and efficiently with your product. Bill Gates rightly quoted, “Your most unhappy customers are your greatest source of learning.”
Once gathered, you must analyse the survey results by looking for trends in customer behaviour and areas to enhance the customer experience. Then, this information must be shared with the teams that will benefit from it the most. For instance, the product reviews can be distributed to the development team and engineers to address the flaws in the product design.
By rapidly responding to customer feedback and making instant changes to your product features, sales techniques or office protocols will ensure that regular customers continue to patronize your business and also tell their peers about the positive experience. They might feel more invested in the company by having their feedback taken seriously and addressed.
Implement a customer loyalty program
While focusing on the customers who are at the risk of churn, you must keep your loyal customers in mind as well. You can reward the customers for their continued loyalty by having a customer loyalty program in place. The more they interact or shop with your business, the more you should reward them. This delights your customers, as they are getting something extra from the experience than just your products or services.
The statistics also show that the top 10% of your customers spend three times more than the rest of your customer base, so you will have to ensure these users are more than satisfied.
Develop your customer communication calendar
Your team must proactively communicate with customers even if they are not reaching out with their feedback. You can consider adopting a communication calendar to drive customer engagement and create opportunities to cross-sell and upsell.
A communication calendar keeps track of your customer communications. It contains the information on when was the last time that a customer has reached out and alerts you in case the existing customers have not interacted with your brand for some time.
This enables you to launch proactive customer service features and promotional offers that remove the roadblocks before the customers know they are there. For instance, if a customer’s subscription is set to expire, you can send an outbound email informing them to renew their account.
Commit to develop and demonstrate industry expertise
Enterprises who wish to attract and keep major clients need to commit to develop and demonstrate domain expertise. Publishing though leadership articles and blogs in trade journals, getting noticed in the community, and winning awards at events are sure-fire ways to establish yourself as an industry expert and will go a long way in building customer support and interest.
You can keep the customers in the loop by publishing a print or electronic newsletter, mailing fliers periodically, and keeping the website updated. Usually, customers are thrilled when the company they patronize is lauded in the news or gets industry recognition.
Focus on customer success
Companies that intend to be successful and care about their customers should implement training programs for their employees to facilitate customer relations. The training must consider all aspects of delivering total customer experience that starts with the company greeting and ends with the issue resolution.
Over 70% of companies have reported increased customer retention by successfully implementing customer retention according to a study by Forrester.
Your customer retention strategies do not have to be time-consuming. They only have to focus on customer issues or concerns and must empower them to have a say in how they are treated or the services and products they purchase.
When customers feel that their opinion is valued and the enterprise they do business with cares about them, they are far more likely to stay brand loyal, and will also encourage others to do the same. In fact, customer loyalty is a natural consequence of improved customer focus.
Most leading companies are actively taking training initiatives for the employees to show more attention to the repeat (VIP) customers. Apart from offering pleasant greetings, the employees are also advised to initiate casual conversation and subtly upsell certain products. When any problem occurs, customers want to be able to trust the business for a swift resolution.
To conclude, it doesn’t take intricate customer retention strategies to keep your customers coming back for more; it only takes insight, empathy, and a keen focus on your customers and their needs. Regularly seek their feedback and implement changes based on it. Include them in the strategy and development around future product updates. Reach out to them on a regular basis to check how it’s going.
You need to treat your customers as partners and constantly reassure them that you are taking their suggestions and opinions seriously. Communicate to them that you are making the changes based on their needs and let them know that you’re both in this together. This will make them feel valued and become loyal to your brand. This will all add up to increased customer retention rates that translate into a reliable and recurring revenue flow.