Top 5 Customer Retention Strategies That Actually Work.
Is there anything more satisfying than acquiring a new customer; even better, keeping existing ones coming back?
Customer retention is a company’s ability to keep existing customers and continue generating revenue from them.
You are in the right place if you’re looking for fail-proof strategies that help retain customers and convert first-time buyers into repeat shoppers.
Importance of customer retention
Customer retention plays a pivotal role in the sustainability of any business, big or small.
When done right, a company can boost its brand recognition to enjoy a more significant ROI, including its existing customers’ profitability and Lifetime Value (LTV).
Selling to an existing customer is 60–70% more successful, unlike the 5–20% you get trying to rope in a new client. While there’s no one-size-fits-all approach however, at its core, a well-executed retention strategy will keep current and potential customers engaged at all times.
Understanding and implementing retention tactics that turn clients, old and new, into brand loyalists will be crucial to fueling your business through the often-murky eCommerce ecosystem. Consider these key points;
- The correct client retention tactic will help you forge loyal customer relationships. What you’ll be doing is creating an experience that satisfies your customers that allows them to engage with your business in a more meaningful way.
- If you want to grow your business’s bottom line, you need to focus on retaining customers and gaining new ones equally. Why? As aforementioned, increasing Customer Lifetime Value (LTV); means increasing customer retention rates by 5%, which equates to boosting profits by 25% to 95%.
- The best way to build brand recognition is through word of mouth, reviews, or recommendations. Who better to be your brand ambassadors who can spread positive word of mouth than your existing clients you’ve done your best to retain?
Top 5 Customer Retention Strategies Used by Leading Brands.
Customer retention is a combination of a bit of art and science.
The art part helps to create and foster long-lasting customer relationships by going above and beyond your customer expectations.
You will need a bit of science to understand your customer’s buyers’ journey, ensure consistent assistance from all touchpoints, and lastly, equip yourself and your team with the right tools that will help you deliver top-notch customer experience (CX).
So, what does client retention mean to your business?
According to KPMG, “Businesses that understand the importance of effective retention marketing consciously invest in customer retention plans because they see it as the biggest revenue driver.”
Consider these five customer retention strategies. They not only work together to deliver excellent experiences that cultivate client loyalty, but they also encourage customers to want to be associated with your brand long-term;
1. Make customer experience (CX) a top priority
Also known as CX, customer experience is an integral part of Customer Relationship Management (CRM).
Because it’s the interaction a customer has with your brand throughout the entire purchase journey; from the very first contact to becoming a satisfied and repeat client.
Most businesses use customer service and customer experience interchangeably. Yet, one focuses on a single touchpoint with a brand, while the other impacts emotions and integrates the entire buyer’s journey into one experience.
Customer experience must be a top priority to all businesses, for this simple reason; “Companies that pay close attention to customer experience reduce churn and increase revenues.”
Whether or not you would like to admit it, customer experience affects all areas of your business. The sooner you create an inclusive customer experience strategy for the next five years, the sooner you will begin to reap some significant ROI.
Contented customers remain loyal. It makes sense, right?
The happier clients are with their interactions with your brand, the longer they will stay with you.
So, if you treat your customers poorly, ignore their reviews, queries, or user service emails, well, you can expect them to drop your business like a hot iron!
2. Respond to customer complaints effectively
The keyword here is “effectively.”
Because while you can respond to customer queries instantly, most businesses fall short where effectiveness is concerned. To say that customer satisfaction is vital is an understatement. It is a necessity!
According to Gartner, 81% of marketers view customer satisfaction as the main competition area in their industry.
59% of customers will stop engaging with a company after several unsatisfactory experiences, according to PwC that includes 17% who will leave for another business after one bad customer experience.
The idea that you can’t please everyone is as true today as it was a century ago. Therefore, no matter the niche, nature, size, or success of your business venture, there will always be a few people who are unsatisfied with your products or services.
So, ensure your clients have a place to voice their opinions (both positive and negative).
Because, no matter the feedback, it will ensure that your product’s roadmap and customer support strategies are heading in the right direction.
Also, if possible, implement tools such as live chats as part of your customer retention strategy.
The main reason(s) for bad customer experience is longer response times. With a live chat, customers are more likely to be loyal to your brand if you can address their concerns with immediate effect.
Best Practices: Resolve your customer queries instantly because, in the long run, an immediate response will help in more sales conversions and repeat customers.
3. Implement best practices for customer feedback
“Your most unhappy customers are your greatest source of learning.” Bill Gates.
Customer feedback is the most effective way to determine what matters more in your company.
- What does your target audience like or dislike about you?
- What are their eureka moments or…
- Turnoffs after interacting with your products/ services, etc.?
Understandably, with so many users, it’s easy to get overwhelmed by the sheer volume of possibilities when you think about collecting customer feedback — from user experience (UX) to customer support and the all-important customer satisfaction metrics.
One thing is clear;
Taking a proactive approach in employing these best practices for customer feedback management ensures you never stray too far from the needs of your current and potential clients;
- Define your objectives at the start of your feedback process to help you narrow down your efforts. Use relevant feedback tools that support easy integration and collection of data for customer experience, specific touchpoints, including response for new products/ services.
- Tailor the feedback process to your objectives using customer survey metrics that best align with your goals and are most relevant to your business growth.
- Collect feedback across multiple channels to help you drill down to specific usability issues (for broader insights)
- With the appropriate Customer Relationship Management (CRM) and survey tools, categorize the feedback collected across multiple channels by bucketing them into support and product feedback.
- Narrow down customer feedback into actionable insights and take action. The best approach is to implement them by priority and volume.
- To determine if you are getting the most out of your feedback efforts, monitor purchase behaviors and new trends.
- Every buyer's journey is unique, and so is a customer's feedback because it’s ultimately focused on making your product and service delivery better. Therefore, make full use of customer feedback for internal brainstorming to help you develop a well-needed balance and customer-centric culture across your company’s team.
4. Provide authentic knowledge to your customers
Did you know that educating customers can be a great customer retention strategy?
At its core, it helps clients develop a better understanding of your brand and better clarity about your products and services.
You can reduce the number of complaints if customers can find information and solutions about FAQs fast, plus you’re effectively building trust and loyalty towards your brand as they find integrity between the information and business practice.
If you can post product demos for your offering, it can help your clients understand the product better and, even better, prevent buyer’s remorse.
Create a connection with your customers by organizing related workshops or sharing content in different mediums, such as updating announcements through your website, blogs, social media, personalized email newsletters, etc.
5. Deliver real-time customer engagement
Not to be mistaken with social “news jacking” or real-time PR; at its core, real-time consumer engagement is a business’s ability to recognize and interact with its clients at the speed or pace that matters to them.
The concept involves providing contextually relevant information that fosters a deeper connection between consumers and brands.
The power of real-time data means that you have the right content, you know when to take the best action and when to offer them (both) at the right moment of engagement. With such, you can Drive ROI, maximize revenue and boost customer satisfaction because;
- You always meet your customers’ expectations, even exceed them, at every point along the buyer journey with relevant offers, content, and communications.
- You create experiences aligned to each client’s needs to increase retention and boost customers’ lifetime value (CLV).
- You respond to your customer’s needs and handle real-time updates according to customer preferences, buyer intent, and relevant data.
Real-time means customer engagement with context. Therefore, it’s essential to master these three core capabilities;
- Use dynamic messaging and personalization to interact with your customers at the right moment and in a less-intrusive way that delivers value for them.
Again, face-to-face interaction encourages conversations and builds personal and reliable customer relationships.
2. Improving customer experience with instant response cannot be asserted enough.
Why? Because with co-browsing, you reduce the number of customer touchpoints. Consequently, you positively impact customer satisfaction when you deliver real-time experiences to your customers.
3. Utilize cross-channel optimization if you have access to multiple inbound or outbound digital marketing channels such as email, organic search, paid search, social media, programmatic display, retargeting, etc.
This strategy can be used to reach and engage new prospects and potential customers. It’s also applicable across multiple marketing networks to increase interactions and improve the customer experience as they navigate from one platform to the next.
Users today expect companies to know who they are and provide a seamless buying experience, irrespective of the business size or success rate. Real-time customer engagement strategies and tools make that possible.
So, if you can deliver real-time customer engagement with relevant content regardless of the digital marketing channel, you will effectively create user engagements that seal the gap between customer experience and expectation.
Keep these points in mind:
Businesses that put more effort into understanding what their clients want offer consumer-specific products, services, and solutions.
Remember, “One-off” customers will not fuel the continued growth of your business, meaning customer retention strategy is crucial to your long-term business success.”
1. Satisfied and loyal customers are a significant growth lever. Therefore, try to meet their needs, solve their problems, nurture them, and keep your clients satisfied to prevent them from churning.
2. Dissatisfied customers churn in a heartbeat. Up to 61% won’t hesitate to switch brands, or worse, leave you for a competitor — customers value ease above everything else. Remember this; It takes up to 12 positive business-to-consumer experiences to make up for a negative one — some clients will not stick around that long for you to keep disappointing them.
3. Customer satisfaction drives business and product decisions. Whether it’s product development, marketing campaigns, customer service improvements, etc., — before you chase market trends or introduce new products, ensure that your actions are customer-first oriented.
4. Satisfied customers attract new customers. Loyal customers not only contribute to high CLV (Customer Lifetime Value), they also become your company’s top promoters that draw new customers in with positive reviews and recommendations.
5. Create a listening and empathizing culture within your team; it is an excellent customer retention strategy.
6. Educate your customers by providing them with authentic and easy to consume information that customers can use when interacting with your products or services.
7. Keep track of your customer retention metrics to maximize your efforts on marketing strategies and put them to work for lasting, profitable results. Metrics such as attrition rates will reveal your churn rate, while your repeat customer data will tell you the percentage of loyal customers that have made repeat purchases.
The customer lifetime value metrics (CLV) will calculate how much money your customers spend during their purchase lifecycles. Loyal and repeat customers spend more, thus creating better yielding lifetime value.
8. You can actively assist your website visitors and existing customers by incorporating surveys and customer interviews that give insight into what customers like and dislike about your product offerings.
9. Create a referral program that rewards both the referrer and the referee. Not only do rewards get you repeat customers, but they can also get clients to send potential high-spenders to your site.
Hopefully, you can now see how a well-optimized client retention strategy can help you understand your customer needs to improve loyalty.
Deliver high-quality customer service and treat your clients positively to make them feel like part of your business journey. With these retention strategies in your toolbox, do you think your campaign needs a complete overhaul or a bit of tweaking?
Which of these customer retention strategies do you think will work best for your business; most importantly, how do you plan on implementing them?
Did I forget anything? Kindly let me know.