We’re all familiar with the adage, “it’s always easier to keep your current customers than it is to find new ones.” In today’s fast-paced marketplace, staying ahead of competitor pricing and product changes can require as much as 5 times the cost to acquire new customers as opposed to keeping current ones.
Some companies do business with the same clients for decades; others introduce a steady flow of new products, frequently modifying or discontinuing older versions. However you run your company, the most important thing when executing your brand strategy, is to keep your customers coming back.
In this article, we will review seven examples of customer retention strategies that have proven effective for leading companies. We’ll also look at some caveats to avoid to ensure that your customer retention efforts are smooth and effective.
Why is customer retention important?
Customers are the lifeblood of any company. Retaining them is important for many reasons but here are two of the most important ones.
Customers cost less to service than new ones.
It’s cheaper and more convenient to keep the customers you’ve worked so hard to acquire. Definitely easier than it is to find a whole new clientele from scratch.
The difference between customer acquisition and customer retention costs can be staggering, which is why customer retention is important.
Customer retention efforts help build brand loyalty.
Satisfied customers who believe in your company’s mission may inspire other people to start having the same values. The result? Happy satisfied clients that will stick with your organization through thick and thin.
Let’s also consider the argument from the other end.
If at any point in time, a customer becomes dissatisfied with the product or service they are receiving.
No matter for whatever reason, they have the option of finding it elsewhere. You can be sure that a competitor is always waiting. And this could also mean that they could take your place if you do not shine in customer service.
This is why retaining customers is crucial. Especially with losing enough customers from your company, your competitors will also be getting better in their competitive strength.
In addition, word of mouth spreads quickly when customers are less than satisfied with their experience with you. The more dissatisfied customers there are, the faster negative information about your company will spread throughout your market. How many times have you witnessed a situation where one person speaks poorly of a product or service?
And then the next person decides not to buy that product or service solely on word of mouth?
Customer retention is also important for different types of companies because we hear horror stories all too often about how businesses lose money and close up shop overnight due to lack of sales.
To recap, customer retention is crucial. At the same time, its goal is simple: make your customers happy and they will do more business with you and spread positive feedback about your company throughout their networks. It’s about creating long-term relationships rather than short-term sales and is far more profitable in the long run.
Customer retention strategies that work
Now that we’ve covered why customer retention efforts are important, let’s look at actual strategies that you can use to accomplish this goal.
1. Survey customers
Survey customers regularly to find out what they want and need from your business. To complete a customer satisfaction survey, you have to show customers that their input is valued and needed by the company.
If possible, surveys should include a mix of open-ended questions and closed-ended ones with a variety of rating scales (from poor to excellent). This way, you get not only numerical data but also insight into why certain elements are important (and less important) to your clientele.
Be sure to follow up with customers who don’t respond or provide negative feedback; this lets them know that their opinion matters to you. You should also ask for suggestions on how the survey could be improved to make it easier for future respondents.
You should also thank those that take the time to answer your survey — after all, they are the people that can become brand loyalists.
When people respond to your survey, ensure that their answers are recorded in your CRM software and any feedback that they gave is carefully listed. This feedback is worth its weight in gold and will allow you to make your product or service better. This is crucial when it comes to retaining customers in the long term.
2. Manage and resolve questions and concerns
When customers have problems, they need to know that someone will be there to fix the issue. Customer service is key for retaining customers because it can save you money in the long run.
Let’s say, you update your UX design, only to find your customers hate the new version and aren’t able to operate your system. If an unhappy client complains about your product or service on social media or through a review website, you might lose revenue if other potential clients are scared away by their bad experience. On the flip side, research shows that when companies are quick to respond to queries and resolve issues, it increases customer satisfaction, which can support positive reviews.
Customer service is even more important for online companies that have to compete with the convenience of Amazon or other similar websites. For example, something as simple as offering free shipping can be a great way to keep your customers happy while ensuring they remain loyal over time.
Even if you don’t have an eCommerce website, offering such perks could help differentiate your company from your competitor’s since it is fairly standard for most online businesses these days to deliver products to their customers for free.
The good news is that when it comes to resolving customer concerns, it never hurts to try again. Here are some ideas you can try when it comes to winning back lost customers and retaining them after that.
3. Build an effective rewards program that incentivizes repeat purchases
Rewards programs encourage customers to purchase more to get discounts on their next orders; they’re usually offered in the form of points.
These programs are particularly effective for online companies because they encourage repeat purchases (in some cases, customers can even get free products).
This can make your company more profitable in the long run while also increasing customer loyalty.
If you’re new to rewards programs or unsure how to implement one into your business model, consider partnering with an existing platform that can offer advice and additional resources for success.
Offering incentives is only one piece of the puzzle, of course. To get customers to sign up in the first place, these programs need to be easy to understand. So go ahead and make it simple for potential clients to get started.
For example, some companies allow new users to rack up points on their initial purchase while others don’t even require registration. As long as they are clearly explained online, you can use your proactive customer service department or another internal resource to help deliver this information as soon as someone reaches out with a question or concern about your program.
4. Identify and mitigate risk factors that influence churn
If customers can see that your business’s product or service is lacking in some way, they’re going to be more likely to abandon ship. The key to keeping customers loyal and committed is identifying the risk factors that might cause them to churn so you can get ahead of these issues before it affects your company.
To ensure we’re on the same page, churn is defined as the number of customers that stop using the products or services that you offer during a set amount of time.
For example, if a customer saw one of your competitors offer a cheaper version of your product at the same quality, this could threaten regular sales enough for them to leave.
The same goes for companies whose products aren’t in high demand anymore. In both cases, a company must put its best foot forward. And also find ways to minimize churn and retain as many customers as possible.
One thing to note is that tracking churn can be difficult because it might be tough to get an accurate reading as to who stopped buying from you. However, there are several other metrics that can be tracked. Using KPI software can help your team stay on top of these metrics and identify the most effective ways to mitigate risk factors that influence churn.
5. Use online channels such as blogging and digital PR as a way to build relationships
If you’re not using modern tools to retain customers, consider the following, easy to implement methods to get started.
Firstly, let’s speak about blogging. This can be surprisingly beneficial for businesses that are looking to build long-term relationships with customers and create strong brand loyalty.
Keeping customers engaged with your website is crucial for repeat purchases. This guarantees that they’ll come back time and time again. Moreover, if you use a good logo maker and create something creative and memorable, your brand is more likely to stick in the mind of your customers.
Another advantage of blogging is that it can help humanize your company. It also goes to show customers you’re not just in it for the sale.
In addition to blogging, you can also make use of digital press releases, which offer much more than traditional press releases, when it comes to showing your business in the best possible light as well as retaining customers.
A digital PR can reach a wider audience. It is a cost-effective way of staying top of mind with your customers. You can also get featured on top sites in your industry when you make use of such a marketing channel.
One thing to remember is that whether you create a business blog or make use of digital PRs, your content should be genuine. And, you should be able to communicate your company’s unique perspective on relevant topics.
Above all else, stay true to your brand and keep your focus. Majorly you should be focused on delivering valuable, relevant content to attract and retain more customers over time.
6. Alert existing customers of discounts for product upsells or cross-sells
If you run a subscription-based business, offering deals to existing customers can be a great way to earn more revenue. This is without having to spend too much money on marketing.
Cross and up-selling can be especially successful because it doesn’t require additional costs to set up.
Plus, the people you’re targeting are already familiar with your brand and have shown interest in your products or services.
To make this customer retention strategy work for your company, simply email current clients about deals that would interest them.
For example, if someone has been using a product for several months but hasn’t tried any of the other items you offer yet, they might appreciate an exclusive discount on a different item from your catalog. This will entice customers to try other products while saving them money in the process.
7. Offer discounts for customer referrals
One of the most effective ways you can retain customers is by offering discounts. You can also be generous about special offers when a customer refers a friend or colleague to your business.
This will make it more affordable for their friends and family members to shop with you. In return, it will also ensure that your current customers remain loyal.
In addition to creating goodwill with potential customers, referral programs also help improve communication between your team and existing customers. This builds stronger relationships while increasing product loyalty at the same time.
If you’re considering building up an SDR process in your company, the above strategies can be used to ensure that your sales development reps reach out to your most active customers and ensure that your retention rate stays as high as possible.
Customer retention strategies can be a powerful tool. Especially, when it comes to increasing sales and boosting revenue in the long term. These strategies can be quite cost-efficient since you’re not necessarily paying for additional advertising or marketing services.
There are several ways that you can improve customer retention rates with your business.
Always remember to deliver value in everything you do.
Also, keep in mind that the most effective customer retention strategies are built on genuine interactions. These interactions are with people who enjoy engaging with your company.
By using the tips above, you’ll be able to retain your current customers. You will also be bringing in new ones over time.