5 Sure Shot Ways for Customer Retention
Do you know 25% business can be increased by retaining customers? Do you know not all products are offered amongst the retained customers?
Every entrepreneur will agree it is not easy to gain a customer. Apart from an excellent product or service it takes marketing, good relationship, better services, competitive advantage, great reviews to gain customer loyalty. And once the customer enters your company’s ecosystem, the last thing you want is to lose them. That is where customer retention comes into action.
Often companies, in the race of gaining new customer, tend to ignore the existing ones.
Why is customer retention important?
- There is a huge opportunity lost in existing customers by not selling them all the products of our business.
- Acquiring a new customer can be 10 times more expensive, than retaining an existing one.
- Returning customers spend more and buys more often and refer friends and family.
- 5% increase in customer retention can increase company revenue by 25%.
Customer Retention Rate:
Over the course of a time, customer retention is measured by customer retention rate. It can be calculated with the below given formula:
Simply, tally the number of customers you have at the beginning of the period and at the end of the period [monthly, quarterly, yearly whichever you want to calculate] and calculate the new customers that are added in that period. Now put the gained numbers in the above formula and the figure you get is your customer retention rate.
A standard customer retention rate differs from industry to industry. You must bring context into the matter and evaluate how you are doing and what your goals are.
Regardless of what your retention rate is, there is always a room for an improvement. Increase in customer retention rate will automatically lead to enhancement of business.
5 Ways for Customer Retention
- Good CRM
CRM [Customer Relationship Management] is a plan or strategy developed to assist companies to improve their productivity and gain customer satisfaction. CRM software is used to track information about customers. Understanding each customer individually helps to increase sales and the salesperson with the help of the gathered data can provide specialized assistance to the customers as per their need. This all can happen when the CRM is efficient. A good CRM helps a lot in retaining customers.
- Smooth Boarding Process
First impression is your last impression. Customers will always by default remember your brand by the first experience they had. 70% of buying experiences are based on how customers feel they are being treated. And if it is positive than they are more likely to stick around and recommend to their near ones. A good onboarding process can set you up for successful years. It should be without any fraction, hands on and personalized. “Retention is the single most important thing for growth” Alex Schulz
- Personalization For Existing Customers
Make your customer feel valued by wishing them on their birthdays, anniversaries, establishment day of their organisation. Small gestures like Thank you notes on the milestones and making them a part of celebration goes a long way. Also, a personalized e-mail offering them exclusive discounts or vouchers on certain amount of shopping, offering them free shipping and returns are few things that can win your customers heart forever
- Pay Attention to Feedback
When you understand what customers likes/ dislikes are, you can change your approach to meet their needs in a better way. There are several customer templates available to gain feedback. NPS (Net Promoter Score) survey results correlate positively to retention. It is a metric for the assessment of customer loyalty for a company’s brand, product, or services. While it is important to get feedbacks from the customers, it is also important to solve any queries raised in it. A quick reply and an immediate action are all it takes to be in a good book of customers.
- Out of Sight, Out of Mind
You cannot stop marketing your product to the customer once he bought it. Inform them with the latest updates, promotions, reward programs and any other content that can help them know more about your product. To stay relevant for a longer period, you must constantly remind your customers about your product via any medium. Every team member keeping in touch regularly with Top 5 customers for other than business also, will help to improve relationships and gain more insights. In this highly competitive world, you cannot afford to lose a sight of your customer. Always remember a loyal customer is a brand ambassador of a product and advertise about it to its near and dear ones.
We can conclude at the end of the day; healthy customer retention makes every aspect of running your business cost effective and efficient. Returning customers are like a brand ambassador of the product. They will not only buy the product but will also recommend it to their near and dear ones. So have you started paying attention to your existing customers already? Don’t forget to follow these tips!
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