When you’re in business, acquiring two new customers feels great. But the truth is, nothing is better than retaining an existing customer. To help you through your customer retention journey, we look at the most practical and Effective Customer Retention Strategies.
Despite the allure that comes with acquiring new customers, retaining existing ones assures you of an increased ROI while saving you the cost of acquiring new ones. But unfortunately, customer retention has taken a back seat in marketing for a long time as marketers focus more on acquisition.
In the current business world, customer expectations have changed. Business objectives and fluctuating economy force many businesses to focus more on retention than acquisition. To help you through your customer retention journey, we look at the most practical customer retention strategies.
What Is Customer Retention?
Customer retention measures a brand’s ability to inspire customer loyalty. It refers to turning a one-time buyer into a repeat customer. A high customer retention rate indicates that most of your customers are choosing your products or services, hence your ability to sustain the customer loyalty loop.
While client retention methods vary from one industry to another, the goal is to convince them not to defect to a competitor. You achieve customer retention by keeping them loyal to your brand, product, or service, preventing them from churning or lapsing.
Effective Customer Retention Strategies
There are several practical customer retention strategies as we have broken them down.
Top 5 Highly Effective Customer Retention Strategies
- Invest in a Smooth Onboarding Process
- Build Customer Trust
- Sending Company Newsletter
- Implement a Customer Feedback Loop
- Create a Customer Loyalty Program
Top 5 Highly Effective Customer Retention Strategies
1. Invest in a Smooth Onboarding Process
After acquiring a new customer, you enter the second stage of the customer lifecycle, customer onboarding. The process includes the steps you take to set your new customers before they start using your products or service.
A smooth onboarding process sets the stage for the kind of relationship you will have with your customers in the long run. When done the right way, it makes your customers feel excited about the future and look forward to continuing to trust your brand. But when done wrong, you risk losing a sale and creating a bad impression that is likely to make a customer churn your services after the first encounter.
A smooth customer onboarding process includes the following steps:
- Sign-up process- ensure that it is simple to make it easy for people to sign up for your services.
- A welcome email- send an email to welcome the new customer and direct them to the product to start using it and get value.
- Determine the client’s desired level of involvement- set expectations for the desired level of involvement to prevent the client from feeling sidelined. For example, some clients may prefer to work with you as a vendor, while others may opt to be hands-off and only hear from you when needed.
- Product walkthrough- take the new client through the steps they need to set up and complete necessary tasks within your product.
2. Build Customer Trust
Trust is the key to customer loyalty and plays a huge role in customer retention. Over time, you build customer trust through every interaction and customer experience you deliver.
If you can convince your customers that they will always get a good deal without much hassle, they will always choose you without worrying about price comparisons. However, just as it is easy to build trust, you can break it easily through overmarketing, valueless communication, and irrelevant ads. Use the following tactics to build customer trust:
- Always provide factual and unbiased information that helps customers make their purchase decisions.
- Set in place a clear way for customers to reach your customer service or tech support instead of leaving them to rely on self-service.
- Allow customers to opt out of your email subscription in a clear, simple, and immediate step.
3. Sending Company Newsletter
Email newsletters effectively show your customers how much you value them. It’s also one of the best ways to achieve customer retention as it helps you:
- Differentiate your business from your competitors
- Demonstrate your company’s values and culture
- Assist people in developing a positive impression of your customer service creativity and performance
- Inspire your customers by setting an example for other companies in your niche
Ensure the effectiveness of your company newsletters by sending a monthly or quarterly instead of bombarding your client’s inbox with daily emails. The newsletter should contain valuable developments in your business, such as sales, seasonal deals, and new offerings. In addition, consider increasing your subscriber list and generating interest in your newsletter by including newsletter-only specials or coupons.
4. Implement a Customer Feedback Loop
A customer feedback loop is a technique of replying to your customers when they leave feedback about your products and services.
Customer feedback can be negative, like when a customer complains about being overcharged. In this case, you need to close the loop by offering your apologies and issuing a refund. However, not all customer feedback is negative. For example, a client may leave feedback after having a memorable experience doing business with you or suggesting improvement.
How you close the customer feedback loop determines whether the customers will want to do business with you again or not. Unfortunately, many brands today still apply the rudimentary strategies:
- Only responding to the most negative customer feedback
- Sending a plain, “Thank you, we received your feedback.”
Instead of relying on those two strategies, try different ways of closing the customer feedback loop, such as:
- Sending customised offers to those who love doing business with you encourages them to spend more money with you.
- Find meaningful ways to close the loop depending on the feedback they leave. For instance, you need to make them feel valued by promising to act on the issues they mention in their feedback.
- Consider requesting customer advocacy to help you acquire new clients. If a customer leaves positive feedback, take advantage and close the loop by suggesting new deals to increase the chances of the customer making another purchase. Customise your feedback to encourage future response rates and share their positive experience with others.
5. Create a Customer Loyalty Program
Customer loyalty programs help keep customers by preventing them from going to your competitors. Furthermore, you can employ customer loyalty programs to boost a client’s lifetime value by incentivising spending more money with your business.
But with so many businesses offering similar programs, how do you use customer loyalty programs to achieve retention?
Here are three ways to leverage customer loyalty programs to create an active customer base.
- Personalising the customer journey – A study by Wunderman indicates that 79% of consumers consider brands that show that they care about them. Use your customer information and preferences in your database to create a personalised loyalty program. For instance, you can give your loyalty program a unique name and provide an excellent loyalty experience based on customer information in your database.
- Simplifying the customer experience – loyalty programs collect customer payment information. Take advantage of this and store the information in your database to make it easy for your customers to make quick purchases and upgrades in the future.
- Keeping your customers engaged and delighted– good customer satisfaction is not enough in a highly saturated market. You need to find new ways to keep them ecstatic and eager to refer others to you. Customer loyalty programs are a great way to accomplish this when done the right way. For instance, if you run an online store, you can create a program that makes paying and receiving goods from your company easy by offering free delivery services. To keep your customers delighted, you need to pay attention to the devices and channels customers use when reaching out to you.
Importance of Customer Retention
Gone are the days when businesses focused more on customer acquisition than retention to demonstrate their growth. Instead, more companies are realising the benefits of customer retention. As a result, they apply the above strategies to realise these benefits.
If you are yet to start focusing on customer retention strategies, the following benefits should convince you.
Existing clients account for 65% of a company’s revenue. In addition, a customer is more likely to spend more money in your business on subsequent purchases than the first time. It’s, therefore, essential to focus on existing customers who spend time and money on your business rather than acquiring new ones.
Retention Lowers Your Business Costs
Keeping an existing customer on board is cheaper than acquiring a new one. If you doubt this, take a moment and think about the moving parts involved in getting a new customer. All these require a hard cost, from email and social media marketing to SEO and retargeting ads. And even after successfully courting the new customer, it may take weeks, months, or even years to realise a profit.
On the other hand, customer retention can increase your profit rates by 25-95%. So although customer acquisition is essential, you shouldn’t focus all your attention on it. However, spare some time to focus on customer retention, and you’ll be saving your business a lot of revenue.
Helps Your Business Stand Out from the Crowd
Being retention-centric helps you stand out in making your customers feel a stronger connection to your business. When customers are happy with your services, they are unlikely to turn to your competitors. In addition, loyal customers are more likely to refer your services to their friends and family.
The customer retention strategies listed above might assist you in developing a good strategy for enhancing customer value. However, to actualise these strategies, you need a well-branded and easy-to-navigate e-commerce website for your business. If you need help designing a business website, contact us today, and we will be happy to help.
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