Customer retention represents all kinds of efforts made by a business to boost the number of returning customers. Although traditionally marketers and business owners were more concerned with acquiring new customers, the value of having a solid base of loyal buyers is becoming more and more obvious. Companies have come to understand that a solid portion of their income comes from their regular customers and that customer loyalty is one of the crucial indicators of a trustworthy business. A good retention strategy can create numerous benefits for your company.
Let’s take a look at the most important ones.
Benefits of customer retention
- It will boost your brand image
In order to fully grasp all the benefits of customer retention, we have to turn to the exact numbers and statistics. But it also affects some aspects of your business that may be more difficult to measure. This especially goes for your brand image. You surely want to be recognized as a brand whose customers tend to return to it over and over again. It’s a great reputation-booster. There aren’t many better ways to show people that your business is reliable and trustworthy.
- It will boost your numbers
But let’s get back to the numbers. First of all, retention is way cheaper than acquisition. In fact, it is 7 times more expensive to bring in a new customer than to make an old one return. Besides, returning customers spend much more. Less than 15 percent of consumers tend to be loyal to a single brand, but this small chunk of the customer base is responsible for 55-70 percent of all sales. For instance, the average repeat customer tends to spend 67 percent more in months 31-36 of their relationship with a company than in the first 6 months.
- It will help you collect conclusive data
Finally, having a large number of regular customers means getting more reliable feedback about your business and marketing efforts. You’ll be able to obtain some very valuable data which will make it easier to make sensible conclusions about reasons for certain types of customer behaviour. This can prove to be very beneficial for your business in the long run.
How to improve customer retention?
- Understand your customer
As we just mentioned, getting to know your customers is crucial. It’s probably more important than ever to give them a personalized experience based on their interests and expectations. And it’s probably easier than ever to track your customers’ activities and buying habits in order to obtain all the relevant data for this task. A free CRM software can help you collect tons of information about your customers’ personal characteristics, preferences, and intentions. As well as, to choose the best course of action based on this data.
The true power of personalization lies in the fact that it doesn’t just take your supposed average customer and then tries to appeal to this imagined person. It rather attempts to reach every single actual customer or prospect with a message designed specifically for that particular person.
Approaching your customers with tailor-made messages and offers at the exact right time can do wonders for your retention efforts. Namely, almost half of consumers have reported that they bought a product they didn’t initially intend to buy only because they received a personalized recommendation from a brand.
- Perks, benefits, and surprises
The quality of your product or service is probably the most important factor when it comes to keeping your customers. They’ll come back because they like your stuff. But why not offer something extra to them and ensure that they never turn to your competition?
Loyalty programs of all sorts can be very effective in this respect. And it makes perfect sense – if your regular customer has obtained a right for discounts or special offers, they will feel as if they already invested something in your relationship, so they won’t be giving up on you that easily. of all sorts can be very effective in this respect.
For instance, take Sephora. They’re widely recognized as a brand that sells quite pricey products. So they introduced a classic point-based loyalty program to attract more people that tend to get discouraged by these prices. It turns out that occasional gift cards and discounts seem very attractive to an average customer, as more than 17 million people have joined Sephora’s loyalty program so far.
Naturally, this makes your loyal customers even more loyal. If your regular customer has obtained a right for discounts or special offers, they will feel as if they have already invested something in your relationship, so they won’t be giving up on you that easily.
Moreover, if you manage to transform this loyalty program into a kind of a game or a competition, things can get even more interesting for your customers. If you take the financial benefits they’ll get from a program anyway, and add a sense of achievement every time they earn a right to a new perk or incentive, you can get them very involved. The mere act of collecting points and competing with others can sometimes be even more gratifying and absorbing than concrete financial benefits.
- Show genuine care
Apart from using a few particular tricks mentioned in the previous section, you should also show genuine care to your customers when it comes to more general issues and activities.
For instance, top-quality customer service can give you a crucial competitive advantage. As much as 93% of consumers have said that they’re more likely to be repeat customers at businesses that offered excellent customer service. It’s also vital that your customer service reps are able to resolve issues quickly. After all, we live in an era that doesn’t stand time-wasting and people will demand an immediate response.
Another way to show that you care about your customers is by offering them free education and onboarding programs. This move will show them that you’re not just interested in people signing up or buying your product or service, but that you truly care about their experience. Help them find their way around and make them feel that they’re making the most of what they bought. This way you’ll undoubtedly be helping your business as well.
- Reaching out
Reaching out to your customers every now and then should definitely be a part of your customer retention strategy. Of course, you shouldn’t bother them all the time with all sorts of silly offers they don’t care about. However, sending a well-targeted email from time to time can help form a closer bond with them.
Here it’s essential that you know your customers well enough. You need to choose what type of message you’ll be sending to each and every one of them, given their personal details and purchase history. This means using the right tone and language in the message, employing the right communication channel and setting the right triggers.
In other words, these messages will work only if they’re highly personalized and are of actual interest to the customer. Reminding a customer of a special discount is a good excuse to reach out to them, but only if the time, place and product you’re offering are carefully picked.
- Customer advocacy
A genuine testimony from a satisfied customer can do great things for customer retention. Even better, it can also help you attract new prospects. People rely heavily on other people’s recommendations and assessments, as 91% of people read online reviews regularly or occasionally. In this respect, an honest review can potentially do a much better job for your company than any branded ad.
So what’s in it for your old customers? It’s simple – you should be encouraging them to post reviews, ratings, and testimonies by offering them small benefits if they do so. For a little one-time discount, you can get a much-needed recommendation that could get you a new prospect, while also getting a satisfied customer that is likely to return to you.
Naturally, all this won’t work if your product or service is below par. If that’s the case, no discount or special offer will get you a good recommendation, and not even the best customer service rep in the world will help you keep a customer that simply finds your product terrible.
But if you don’t have that kind of a problem, then the best advice would be to show actual care for your customers, 24 hours a day. All the mentioned tricks will surely give you a little boost, but to truly maximize the success of your retention efforts, you’ll need a genuine customer-centric mindset. Only by really putting your customer first you can make them want to come back.