Keeping up with your competition isn’t easy in the digital world. Consumers are constantly being fed innovative marketing techniques and fresh content. So without a solid customer retention strategy, a business can easily get left behind. The positive side to marketing is, if you’ve already convinced a customer to buy from you once, they’re more likely to buy from you again. This is where retention comes in. Now all you have to do is give them a reason to stay.
What is customer retention?
Customer retention is the process of deterring customers from purchasing from or interacting with another company. Whilst around 44% of companies focus on customer acquisition, 18% focus more on customer retention and around 40% focus on them both equally. Customer retention comes after you’ve found and served an existing customer. Some believe this step is just as important as the first ever purchase, as it increases the likelihood of that same customer coming back. Reducing future costs in marketing and business materials.
Why is customer retention so important for a business?
Although getting those initial customers is crucial in having a start up business, customers who keep coming back always make up a sufficient portion of a company’s profits. Once they have bought or interacted with your business once, they’ve had an insight into elements such as cost, delivery, quality of goods and trust. All of which are key factors in a customer’s experience. A few reasons to consider having a customer retention strategy include:
- Repeat customers tend to spend more
- More likely to suggest the company to others
- Loyalty
- Reliable and repeated data
- Lower marketing costs
How to increase customer retention
The best customer retention strategies are dependent on business goals and insights. If a business’s main goal is to increase customer loyalty, the retention strategy would use techniques that focus on this. This might include improving customer relationships, providing discounts, building B2B relationships and using personalisation. Here are 5 ways to improve your customer retention.
Maintaining excellent customer service
Although this is a given for any business, finding out exactly what your customers consider good customer service is key. Even if you’re happy with your support services, there will always be areas a consumer isn’t happy with. To improve customer service and ensure you’re doing exactly what your audience wants, including strategies such as consistent communication, a range of contact options and recruiting dedicated agents can help. The main aspect of customer service is being reliable.
Personalisation
Collecting customer data can be used to improve their experience. Before contacting a customer, you should know their preferred platform, recent purchases, and what previous interactions looked like. This gives off the impression that the message and services are for them and them only. By offering a personalised experience, customers feel part of the company but also have trust in the fact you care for their needs. Personalisation is much easier to succeed in if customers keep coming back as you have plenty of data and research to go off.
Gifts and discounts
One way you can offer your customers appreciation is through gifts and discounts. Offering customers a discount along with a personalised message is a great way to offer an incentive. Another easy way to do this is by creating memberships or special accounts, and sending them VIP-only discounts or techniques such as free delivery.
This strategy can also include simple gestures such as sending birthday messages, putting vouchers inside parcels or having secret sales.
Customer surveys/reviews
Sending out surveys either on a monthly basis or after each purchase can help to both keep and attract customers. These surveys not only tell your customers they matter, but they also suggest improvements for a number of business matters. A good survey will have a mixture of multiple-choice questions and free-text answer fields.
Build a brand community
Just like many of the other strategies, building a brand community is key to building a strong relationship with your customers and the wider world. Once you’ve created your brand community, measuring it becomes easy. From this, you can understand why people love your brand, and use this to improve marketing and business techniques.
This community can also be crafted through the use of social media, online portals, email marketing, events and memberships.