7 Tips to Increase Your Customer Retention Rate
Looking for ways to reduce customer churn? Check out these 7 highly effective tips to increase your customer retention rate.
7 Effective Customer Retention Strategies to Stop Churn and increase customer retention rate on your site quickly.
Many companies focus more on acquiring new customers than on retaining existing clients, but did you know that around 65% of your business might be coming from repeat customers?
What’s more, you have better chances of selling to an existing customer (60-70%) than to a new customer (5-20%).
Another statistic shows that increasing the customer retention rate by 5% can help you increase profits by 25-95%.
These are some of the most eye-opening customer retention and loyalty statistics we found on SmallBizGenius. You’ll find more of them below as we explore some of the most effective customer retention strategies to stop churn and improve your business.
Ready to increase your customer retention rate?
Let’s get to it.
1. Be Honest and Transparent
Consumers appreciate and expect honesty and transparency from brands. They want to know what you can deliver, so you need to communicate clear expectations.
Let them know upfront what to expect from you. If you allow returns (to keep them coming back, you should), inform them about your return and refund policy.
If you offer free shipping on orders over $30, for instance, let your customers know before the checkout. Otherwise, your cart abandonment rates might increase.
If your response time is 24 hours, make that clear on your website so that people don’t get frustrated if you don’t respond instantly.
2. Create a Customer Feedback Loop
If you really want to increase your customer retention rate, find out what they really think about your brand.
According to SmallBizGenius, 77% of consumers favor brands that ask for feedback.
Gathering customer feedback will help you understand why some of them are leaving and what makes the rest stay with your company. You’ll be able to track and analyze your churn metrics and identify areas for improvement.
Surveys will help you learn more about your customers’ pain points and their likes and dislikes regarding your products/services. You can even use open-ended questions to get recommendations for improving your services and providing better customer experiences.
You can ask for feedback on social media as well, where you can engage with customers in back-and-forth conversations and strengthen relationships.
3. Improve Your Customer Service and Support
Did you know that 93% of consumers are more likely to make repeat purchases at a brand if it offers excellent customer service?
Zendesk found that one bad experience with a brand will make 50% of customers purchase elsewhere. That number reaches 80% when there’s more than one bad experience.
How you treat your customers is everything. It can make or break your business, so it’s paramount to identify opportunities to improve your customer service and support. Map your customers’ journey to see if there’s any friction and take action to eliminate it.
Provide online customer service training to your agents to improve their skills and ensure they go the extra mile to meet your customers’ needs. There are dozens of high-quality customer service training courses that can help your team learn how to exceed customers’ expectations.
4. Take Complaints and Negative Reviews Seriously
In a recent survey, ReviewTrackers found that 94% of consumers avoid businesses with negative reviews. The survey also revealed that 45% of consumers are more likely to engage with a brand that responds to negative reviews.
Ignoring them is not an option if you want to attract and retain customers.
Handle every complaint promptly, ensuring you acknowledge the problem, offer a solution, apologize for the poor experience, and thank customers for reaching out with their issues.
The same goes for negative reviews. Always respond in a friendly and helpful manner, showing that you care and put your customers’ needs first.
Don’t use default answers—many companies do this, and it’s a bad practice that paints a picture of a company that doesn’t care enough to take the time to provide personalized support. Listen to your dissatisfied customers and treat them like you’d like to be treated.
5. Set Up a Loyalty Program
Loyalty programs are brilliant customer retention tools. If you reward loyal customers for sticking around, they’ll be less likely to jump ship and search for better experiences elsewhere.
The key is to provide real value through your loyalty program.
Include incentives like early access to new products and sales, special discounts, exclusive gifts with every purchase, members-only giveaways, or anything else that will encourage customers to stay.
Other popular incentives are points for every dollar spent that members can redeem for cash, gift cards, and other purchases.
Over 70% of consumers will recommend a brand if it offers a good loyalty program. So, if you set one up, your loyal customers will even get you more referrals.
6. Offer Incentives
Most consumers (75%) favor companies that offer rewards, and not only through loyalty programs. Offering discounts, gift cards, product bundles, limited-time offers, and referral bonuses are one of the best ways to retain clients and attract new customers.
Offering incentives to at-risk customers is quite effective for reducing churn as well. Just make sure you can maintain profitability. The profits you can gain from all those retained at-risk customers should outweigh your retention program’s costs.
7. Stay Connected with Your Customers
You shouldn’t stop promoting your products or services to someone just because they’re your customer. You need to nurture them and keep your brand top of mind.
Send weekly email newsletters with exclusive content, important announcements, and anything else that addresses your customers’ pain points. Organize contests and giveaways on social media, and provide high-value content on your blog, including relevant videos.
Don’t forget to maintain a customer communication calendar. That way, you’ll know when you’ve reached out last and to whom and refresh your relationships with customers who haven’t interacted with your brand for a while.
You’ll manage customer engagement as well and identify new upselling and cross-selling opportunities.
Give a Boost to Your Customer Retention Rate!
Increasing your customer retention rate comes down to engaging customers and providing them with excellent experiences. To achieve that, reduce churn, and turn your customers into brand advocates. Also, you must listen to their needs, provide real value, nurture them consistently, and reward their loyalty.