It’s a rare business strategy that doesn’t centre on customer acquisition, be it the creation of a dedicated sales team looking for new leads, a brand marketing campaign or advertising on social media. Customer acquisition is certainly vital to many businesses, but customer retention can be just as important. Aside from generating revenue, good customers will provide additional value to your business and a good strategy for customer retention is rewarding, enjoyable and financially astute.
Why customer retention pays off
With so much hard work being put into gaining new clients, you’d be surprised at how many businesses don’t put the effort into keeping them. Once they’re on board, you need to keep investing in them. They may have signed up for a service or purchased a product from you, but it’s more than just a simple transaction between you both – it’s about building an authentic working relationship.
This extra effort will pay off. Customer loyalty encourages repeat business and research shows that customer retention is proven to be cheaper than customer acquisition. Not only can it cost five times more to find a new customer than to retain an existing one, increasing your customer retention rate by just 5% can increase profits from anywhere between 25% and 95%.
How loyal are your customers?
Taking a little time looking at your own customers can certainly pay off. How do they think about and interact with your brand and/or products? Do they feel happy every time they deal with your company? Do they continue to get good value from what you have sold them? For more insight you may wish to examine your ‘churn rate’ – a metric that measures the percentage of customers who end their relationship with a business within a particular period. This can help to segment and target customers who may need some extra attention.
Put simply, a loyal customer will become a repeat customer. If they’re already happy with you, there’s no reason for them to go elsewhere. They may also give you favourable reviews and feedback that you can use on your website and in marketing campaigns, to show you to be a reliable and authentic working partner. This in turn will help you prove your credentials when it comes to attracting new customers.
How to improve customer retention
So how can your business turn existing customers into repeat buyers? As well as offering a professional service at good value, the most important part of maintaining your relationship with your customers is to put them first. Keep aware of what matters to each of them individually. What can you do to set your business apart from the competition? Create a sense of customer loyalty so that even if they are presented with other options, they will always choose you over the rest.
If you’re not sure where to start, here are some simple ways to make sure your customer service offering is consistently good enough to keep your clients satisfied:
Respond to customer queries quickly
Ideally a swift reply in person or on the phone will come with a speedy solution to a question or problem, but we know it’s not always that simple. If you can’t give a customer the information they need straight away, make sure they know when they’re likely to get an answer – managing customer expectations is a big part of offering your best customer service. Never underestimate the importance of speaking to a human being rather than a robot – whether this is someone at your company or a virtual receptionist. Most people still really enjoy a personal touch and you’ll also benefit from getting to know your customers better too.
Offer your customers multiple support channels
We’ve been seeing people doing business at all times of the day during the pandemic. Even if your staff have gone home, it’s important to make sure that you’re still offering your customers a channel to reach you. If the staff phone line is only live during 9–5, make sure to offer alternative out-of-hours options, such as choosing an answering service, or adding a web chat box.
Give each customer the ‘VIP’ treatment
Who are your most loyal customers? Key indicators are how much they are spending with your company, or if they are brand advocates and can influence other potential buyers. Once you know who your VIPs are, you can use this information to maintain and nurture the relationship perhaps by offering an exclusive and personalised service. You could even reward their loyalty with special offers and incentives.
Creating and refining a customer retention strategy will take time and effort, it’s not a quick fix. It will, however, help to create loyal and trusting customers who keep coming back, time and again.