Did you know, a 5% increase in customer retention translates to more than a 25% increase in profits? (Source)
Read this blog to know why customer retention is essential for businesses to stay competitive. Besides, we have shortlisted six path-defining strategies to enhance your customer retention game.
Be it a large & fully established or a small start-up; customer retention is something they all should aim and strive for. To succeed in the long-term, once a business obtains its customer’s loyalty, it can survive in the ever-changing market.
When we talk about profitability and customer base, expanding a business is a way to achieve consistent growth. More people buying products or services is directly proportional to more revenue. A large number of consumers are flying customers whose reviews do not carry much weight than regular customers. Regular customers trust the brand since they are satisfied with the product and its presale & post-sale services.
It is also true that acquiring a new customer can cost a business up to 5 times more than retaining an existing customer. Existing customers are likely to make a second purchase, are more resistant to fluctuating prices, and are as much as five times more likely to forgive in case of dissatisfaction. (Source)
How you maximize the profitability of each customer will determine your customer retention strategy. Following are some of the 6 ways through which businesses can enhance their customer retention strategies. Let us look at it one by one.
The churn means a customer has stopped doing business with the brand. They may have either opted out of the brand or stopped the subscription, which implies unsuccessful customer retention. Without the required data or information, brands cannot figure out the pain points. It is necessary to capture qualitative & quantitative data in a prescribed template which serves as a valuable input for arresting the uptrend and then reversing it.
A feedback mechanism is a valuable tool that continuously provides relevant inputs to the brand to improve its resource optimization. To start with, first, it is necessary to obtain customer feedback in a structured template. Then study it and find out trends in their buying patterns based on their responses.
Finally, share the findings with the concerned departments like the sales team, technical team, and top management to improve the product as per the responses.
Customers may need help post-purchase. It is for the brand to proactively reach out to them to solve product/service usage concerns. That builds up the platform for up-selling and cross-selling. The customer calendar gives a customer’s last purchase date, tracks their communication and previous interactions with the brand.
As an exercise towards improving customer retention, personalized offers and discounts can be sent through email or SMS. It’s an attempt that the brands can convey to the customers that they are still in business.
A company’s newsletter is an effective and cost-effective tool to retain customers. It is done through email automation, where recent updates and offers are sent directly to customers’ mailboxes without any manual intervention. When customers open up their inbox, they are reminded of the brand.
Instead of concentrating on customers who are not interested in the brand, it is wise to reward loyal customers that should exceed the value of goods and services they have paid for. It will keep them satisfied, and they will spend much more than the rest of the customers. The more they shop, the better they should be rewarded since they are heavy spenders on the brand.
Every brand should bear in mind that it does not mean that they trust the brand when a customer buys their product. Building trust by fostering customer relationships takes a lot of time and effort on the brand’s part. Trust is based on a brand’s beliefs, reliability, quality, and consistency in product quality over time. Therefore, delivering excellent customer experiences across touchpoints throughout the customer journeys is pivotal for customer retention.
Retention existing customers rather than acquiring new ones is a sound business strategy to improve your business bottom line. Rewarding your loyal customers, providing them post-sale services, and offering them personalized discounts from time to time can make a difference.
Proving consistent excellent customer service not only improves your customer retention rates but can turn your customer into brand advocates. It undoubtedly becomes the catalyst to acquire new customers.
Here at Maxicus, we help businesses shape end-to-end customer journeys that eliminate churns, improve Net Promoter Score (NPS), and build a lasting relationship with customers.
If you are dealing with a low customer retention rate, we will turn it around for you. Get in touch!Categories: