In this fast-paced age, where consumers are spoiled for choice, we all know that it is not easy to keep a customer loyal to your products and services. Every now and then, there’s a new shiny product that appears in the market, and the competition is fierce. So what is the best way to prevent these inevitable waves from rocking your boat? Of course, great customer retention strategies! As they say, the easiest way to grow your customer base is to not lose them!
What is customer retention?
Customer retention is a company’s ability to ensure that a customer remains loyal to their products in a specified period. If a customer gives you steady business without becoming dormant or changing their go-to company for the said product, then it suggests a high customer retention rate for the company.
Why is customer retention so important?
While customer retention implies that existing customers continue to buy from your company, high customer retention also supports the company’s ability to attract and retain new customers. The reputation and value created by loyal customers is a massive force to attract new customers.
While acquiring new customers is a win situation, it’s a fact that a greater ROI is possible by retaining your current customer base. The costs involved in keeping your customers coming back to you is said to be 5 – 25 times lesser than that involved in gaining new ones!
Did you know that many businesses lose more than 20 per cent of their customers every year on an average because of poor customer retention strategies? In the worst cases, the percentage is believed to be around 80 per cent! It’s worth investing time and money in improving your customer retention rate early on if you want to achieve long-term growth and profit.
A small increase in retention has the capacity to cascade and multiply its effect over time. It can be doubly powerful than customer acquisition.
11 Customer Retention Strategies To Boost Your Profit
The rewards of well-thought customer retention strategies are that they lead customers to experience a sense of loyalty towards the product. The creation of a positive sentiment makes the customers come back for more.
Here are some top strategies that can work wonders if you invest in them:
1) Reduce Customer Attrition
A business invests a whole lot of time, money and efforts in building their initial customer base, and they are often successful. But the most important part of acquiring customers is what you do next to keep them with you for years to come.
Many marketers lose contact with the customer once a sale is made, which can result in the customer losing interest. An unattended customer is an easy bait for competitors who are fiercely trying to acquire new customers. The cost of replacing a customer would cost the business a small fortune! If you plug in the attrition hole, growth is inevitable and cost-efficient.
2) Approach Dormant Customers
It’s a well-established fact that acquiring new customers is expensive. But what do you do when the incoming revenue from existing customers has already taken a hit? Instead of dedicating too many resources to get new customers, you can target your dormant customers instead.
These customers already showed faith in your products/services once, and you failed to keep them interested. Gaining their loyalty again is possible if approached in the right way. From sending them exclusive offers to making them feel missed and valued, marketers can reach out to them again.
Engage with them while also collecting feedback on why they are no longer buying from you. Your sales can reach newer heights if you can manage to bring these customers back onboard.
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3) Tackle Buyer’s Remorse
Once an initial sale is finalised, it’s important not to ignore the customer, while caught in the drive of bringing on newer customers. A finalised sale is the starting point of a healthy customer relationship. When a customer has finally seen value in your product and agreed to come on board, they are yet to become loyal to you.
They are yet to experience the product and see whether all that you promised is true. The flicker of doubt persists unless you are with them every step of the way ensuring that they made the right decision.
It’s important to engage with the buyer and give them more information than they were given before the buy. This will not only address their fears and gain trust, but will also enable you to sell your products to them for years to come.
4) Maintain The Integrity Of Your Product
When we convince a customer to make a sale, we promise a whole lot of things to the customer. It’s important to continue to be on your best behaviour after the sale! Ensure that what you say to a customer is consistent with the actual usefulness of a product.
Do not oversell something that you are not sure of. Customers appreciate genuinity and it’s key to their loyalty. When the design, quality and reliability of your product/service matches the buyer’s expectation and your pitch, you have in your hands a trusting customer who is willing to buy more from you.
5) Treat Customer Complaints as a Business Opportunity
Did you know that around 95% of customers who are unhappy with your product or service, do not register a complaint? They just switch companies or stop using your solution. And not knowing the reason is worse than losing a customer!
It’s critical that you find out a customer’s complaint because word of mouth is more effective than it may seem. And if your competitor is analysing your customer’s behaviour, the complaint falling in their hands instead of yours can be a terrible thing.
So work out a system which regularly asks your customer about how they feel about your offering, and tailor your responses in an honest and useful manner. The way you respond to a complaint will decide how to customer portrays your image in the market, which is vital to keep your business flourishing.
6) Customer Service is Top Priority
An extraordinary delivery of service to customers is prime to any company’s rise to excellence, but often majorly ignored. When the quality of customer service exceeds a customer’s expectation, they are sure to share their experience with others. This kind of organic growth can lead to the generation of new customers and strengthen the loyalty of other existing customers.
When a customer registers a complaint or asks a query, respond with a useful solution to their problem. If the matter raised puts the company at fault, do not pass the buck, rather offer honest apologies and get back with a solution that’s in the best interest of the customer.
Sometimes when a solution doesn’t exist, honesty can go a long way. Hire the best problem solvers to be in charge of customer service. Poor service can push customers to reach out to your competitors.
7) Maintain A Communication Calendar
Ensuring that your customers feel valued is a matter of healthy communication. Maintaining a calendar to plan your communication is one of the most efficient customer retention strategies. The plan can be divided into pre-sales, sales and post-sales categories.
From communication through letters, phone calls and emails to surprising customers with special offers, the key is to keep the customer engaged organically. Make sure you are not spamming your customer with unwanted non-personalised messages.
Use the opportunity to send useful articles to educate your customer about your product. A customer’s appreciation can go a long way!
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8) Inspire Customers With A Mission
Loyalty is a strong emotion and branding plays a very important role in gaining your customer’s loyalty. Sometimes sales tactics and communication systems are not enough to keep your customers happy. Rather, your brand image can inspire a customer to be loyal to you.
A lot of companies associate their product and part of their earnings to a cause that’s dear to them. Most consumers are aware of the environmental consequences of their consumption. If your company is able to let customers feel altruistic about their buy, it’s a great place for a company to be.
9) Personalization Through Social Media
Sometimes it’s difficult for a company to seem human in the eyes of a customer. This can complicate the customer relationship when they cannot imagine a face behind the communication platform. It’s easier to be tolerant towards discrepancies in a product when you can imagine an error-prone human being behind it.
To overcome this challenge, it’s vital that you communicate with customers on social platforms and encourage them to engage with you! Reach out to your customers publicly through social media and encourage them to share their experience with you. Do not copy paste message templates, which is only going to make you look more robotic. Be human, and have some fun with it!
10) Surprise And Delight Your Customers
Everyone likes a little extra, especially when it’s free. Surprising your customers occasionally with not-necessarily expensive, but thoughtful gifts can really boost up your loyalty points. From a hand-written note to a ‘Thank You’ memorabilia, the customers can be delighted with a variety of options.
This gesture of going out of your way to demonstrate care and authenticity is certain to please them. Encourage them to share their experience and snippets on social media and tag you to increase your brand awareness. You can share similar things on your company profiles to showcase your company culture!
11) Gather Testimonials From Happy Customers
Most customers are convinced of your brand, less from your own advertising, and more through the word of mouth. Customers believe other customers who have invested in your product and experienced the service first-hand. This makes social proof a very important aspect of customer retention strategies.
It’s common knowledge that most consumers make a well-educated buy these days by referring to online reviews and customer insights. So it would work well for you if you spent some time in collecting testimonials from your customers to showcase them on your website and share them on social media.
Have you tried and tested any other customer retention strategies that have worked or backfired on you? Share with us in the comments below!
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