The Ultimate Guide To Customer Retention Strategy
Anybody who’s watched ‘The Office’ knows it’s 10 Times easier to keep a customer than to gain a new one, check out this guide to customer retention for improved revenue.
Today, competition among businesses is growing rapidly.
In such a competitive era, it is difficult to acquire new customers as well as retain the existing ones.
For all these reasons, you must be well aware of the top customer retention strategies for retaining your customer for a long time.
But before we dive deep into customer retention strategies, let’s try to understand what is customer retention & why it’s important:
What is Customer Retention?
Customer retention alludes to the ability of a company to hold its clients over some predetermined period of time.
Customer retention begins with the primary contact an association has with a client and proceeds all through the whole lifetime of a relationship and fruitful maintenance endeavors consider this whole lifecycle.
It is always better to have long term and valuable clients who have full belief in your brand and are always ready to continue services from your organization.
Why is Customer Retention Important?
For business owners, the larger part of their job lies in acquiring new customers.
A large amount of money and effort are required for this cause. They believe that acquiring more and more customers will give them immense profits.
Why don’t they understand, it is really an expensive process to adopt new clients rather than keeping the existing customers.
It has been analyzed that acquiring new customers is 7x as expensive as keeping the existing ones.
That’s why customer retention is very important to boost revenue for your business.
Benefits of Customer Retention
Retaining customers requires fewer efforts as compared to acquiring new customers. There are so many benefits of customer retention which are explained below:
Reduce Marketing Cost
Getting new customers needs a lot of effort, expenses, and resources.
But if you keep focusing on your current customer who are already praising your brand this is a much easier task then landing a new customer.
This will reduce your spending that you might be doing on different advertisements and marketing strategies.
Faithful Customers Increase Sales
Loyal customers have a relationship with the organization and trust the brand more than new clients do.
Since a present client has been with the brand for quite a while and has encountered the item or service directly, they’re bound to overhaul or make a recurrent buy.
Likewise, stable clients are better at verbal exchange thus your customer obtaining costs decline.
Enhance Brand Image
Brand Image is calculated as the interpretation of customers on the products and services of any brand.
If your business is having a positive brand image, then it will definitely help you to acquire new customers, increase your business revenue and reduce the overall marketing cost.
How to Calculate Customer Retention Rate
It is important to retain your customers rather than hunting for new customers.
Bringing in new customers requires a lot of marketing tactics and advertisements which ultimately requires a lot of additional spend.
On the other hand, retaining customers does not need any kind of funding or marketing strategies.
You can calculate the customer retention rate and always try to increase it for the success of your business.
For calculating the CRR (Customer Retention Rate) you might be needing the below information –
- Number of customers at the end of a period (E)
- Number of new customers acquired during that period (N)
- Number of customers at the start of that period (S)
Now, with the help of the above information, you can easily calculate the CRR by using the below formula –
CRR = ((E-N)/S)X100
Let’s have a look at some of the best customer retention strategies that businesses should adopt for retaining customers:
Target Customers with Special Offers
Surprising customers with special offers will always make them happy and this will add more trust and value towards your brand.
With the help of CRM software, you can track customers’ purchase history and then can search for related offers from the market.
This will help you in choosing the best offer for your customers that will suit them the most.
How you can target customers with special offers
- Create a list of customers who have not bought anything from you for a longer time
- Make a list of customers who have subscribed to your newsletter
- Send them a special deal or offer on different products
- Show that you care about them and make them realize that you have not forgotten them
Build Out A Gamification System
Gamification will always work when you are trying to retain your customers on your brand.
Gamification is nothing but an application of game-thinking in non-game contexts.
Most of the time, getting new customers is a little expensive task and it can impact the overall finances of your company.
The gamification follows the traditional game system that helps in customer retention.
How building a gamification system is useful to retain your customers
- You will be able to know your customers in-depth and then likewise you can arrange different offers and prizes for them
- It will provide you with increased sales as customers will get involved in the game and prize thing
- You can arrange different kinds of monetary awards for your all customers through gaming
Communicate and Share Results on a Regular Basis
It is important to analyze that your company is delivering better results and ROI for your customers.
Knowing this information, customers will never think of leaving your company and will add more trust to your brand.
Now, this demands to track and report the data on the metrics that the customer really wants to see and can relate to their goals.
How to communicate and share results on a regular basis
- Inform about results to your customers via emails or
- Share a monthly calendar with them having all the required information and update it daily
- Show them the brand has featured specific magazines, raises $xx seed funding, achieved sales number etc.
Leveraging Social Proof
Social proofs play an important role when customers are getting involved in the buying process. It is common to read reviews and ratings of the company and then make a decision for avoiding the chances of loss. Being a marketer, you must understand how social proof works. After that, involve in understanding the campaigns for inspiring customers to make the right decision instantly.
Let’s see how to leverage social proofs –
- After customer purchase, send a request for getting reviews
- Ask customers for giving a testimonial via email
- Simplify review submission by optimizing your website
- Get reviewed from the customer on review website such as Trustpilot
- Involved in the case studies creation part knowing customer experiences
Benefit from Returns and Refund Policy
You must take care of your return and refund policy which is defined for your customer.
The returns policy covers such a situation where the customer might want to bring back an item that has been purchased before and exchange it for either cash or can demand a product replacement or it may want store credit.
The customers may have different reasons for returning a particular product.
Here are some top reasons for which the customer returns a specific product
- The customer might have ordered an incorrect price of the product or of incorrect size
- They might suddenly realize that they don’t want this product
- There might be no reason for returning a product
- The product might have not matched as per the expectation of the customer
- The company might have shipped an incorrect product or of incorrect size
Here are some benefits of having the best return or exchange policy –
- It will help the customer to shop without the fear of wrong product buying.
- The best return or exchange policy helps the customer to add trust to business.
- Return policy makes a customer happy and will receive positive reviews from them. We all know reviews are very important for branding.
Regularly Ask for Feedback
You will never get success in improving customer retention until you realize why your customers want to leave your organization.
Once you will get the reason, it will be easier for you to correlate signs and take necessary precautions to keep your customers happy.
This demands to ask feedback from your clients on a daily basis. Opt for using a customer feedback tracking tool and track all the feedbacks of your customers.
Knowing all the feedback, you will be able to know the percentage rate of your customers’ happiness and steps to be taken to improve processes for satisfying customers.
Why it is important to ask for regular feedback from your customers
- Improve your products and services
- It helps in analyzing and measuring customer satisfaction rate
- It shows that you are valuing their feedback and opinions
- Feedbacks helps in providing the best customer experience
Build Killer Rewards Programs
One of the best ways to increase customer loyalty as well as retention by treating them with more value and adding values to their services.
All these can be done in the form of a rewards program or customer loyalty program.
You can arrange user-generated content, gamification, loyalty bonus and arrange rewards for customer referrals.
All these are simple customer retention tools that you can run to add value to the services of customers.
How rewards programs are adding value in the customer retention
- It helps in boosting the growth of your company
- Arranging rewards are generally cost-effective
- Increase the sales of your company
Learn from Customer Complaints
Customers who complain are considered as the biggest marketing assets.
With the help of customers’ complaints, you get to know about the major defects of your products and services.
Complaints help in letting you know what kind of improvements you need to make in your business and what are the things that you need to ignore.
It has always been said that if a customer has complained about something about your product and you have resolved their problem then there are more chances that customers will do business with you again.
How customer complaints provide benefit to your business
- Identifies the list of faulty products in your organization
- Finds out different ways to take your business to the next successful level
- Helps in testing the internal systems and processes
- Provides the opportunity of service recovery
Use Live Webinars to Educate Customers
The webinar is a powerful lead generation and we can say the best customer retention strategy. It’s the best technique to revive a downgrading business online.
If webinars are performed in the best manner then there are full chances to convert your prospects into potential customers.
Webinars build trust, impact the audience and inspire them to use the product or services.
With the help of a webinar, a business can achieve all the goals of content marketing.
That’s why it has been said that Webinars are powerful.
What are the business benefits of Webinars
- Build a brand reputation
- It demonstrate your expertise
- Does not require high budget
Use a Human Touch to Surprise & Delight
You can always add a human touch to surprise and delight your customers.
Even though you are interacting with your customers with the help of different technologies, you can still win their human touch.
Using tweets, brands’ emails, messages can be felt as cold on the contrary social media strategies are not as successful.
If you are chatting with your potential customers, you can add some fun aspects to your social strategies.
Although you can create some fun contests to win your customers’ hearts.
- You can say Thank You to your customers
- You can Surprise them by doing things beyond customer expectation
- Offer them something extra that will add value to their services
- You can offer them insider access by offering customer rewards
If you are really impatient and want to do anything to retain your existing potential customers, you can follow the above-defined customer retention strategies.
With the help of these techniques, you will be able to retain all your customers and will be able to make them happy and satisfied.
Ultimately, all these will end up in adding huge value and success to your business and obviously retaining your valuable and potential customers.