Customer retention, as an art, is like a castle that many businesses dream about, but very few have the keys to it. Many have tried to discover what really makes customers stick around their company; however, they sometimes lose track of it and continue to remain in the dark.
According to recent research by Zippa, the probability that an existing customer will patronize a brand is about 60–70%, and the chance that a new customer will patronize the same brand is between 5-20%. This shows that customers want to work with a brand they can trust. Since there are few chances to acquire new clients, it is wise to develop strategies to make every new client a recurring client. The same research also shows that existing customers will not only buy more from a brand but will also try new products and bring in more customers.
If customer retention proves to be this important to the advancement of a business, then you must learn the art and strategies to achieve it. The rest of the article explains proven strategies for attracting repeat business.
The first step to building a successful customer retention strategy is understanding your customers. Since marketing is a one-to-many transaction, it could be difficult to understand the dynamic behavior of each customer, hence the need to employ tools that can interact with specific details of customers. Also, make efforts to understand customers based on their buyer’s journey and unique customer persona. This helps you understand how to relate to them, what product recommendations will be of value to them, and the marketing strategies that will align with their values. For instance, if a portion of your customer base consists of teenagers, it will not be ideal to use marketing strategies or recommend products that are only fit for married couples.
Have you ever read email newsletters from other companies that make you feel like their next-door neighbor? The emails are crafted with so much accuracy that they align with every fiber of your being. That’s how personalization works. People appreciate businesses that make them feel important. Though they know there are many of them, they still want you to make them feel like you’ve got only them. Therefore, use customer data to personalize your communication, offers, and recommendations. Based on their past purchases, recommend similar products and new products that can be used to supplement products they previously purchased.
Know that your customers always have something to say about your products and services. Giving them a chance to say it and, more importantly, acting on their comments is one of the best ways to increase their sense of importance to your brand. In instances where customers prefer to air their opinions on social media and give reviews on the company website, it’s advisable to respond to every single one of them and treat their complaints as urgent and important. This helps you know what your customers really want and how best to meet their needs.
This is a potent way to leave a lasting impression on your customers. Loyalty programs are usually organized to recognize and reward customers for their loyalty and consistent patronage. It creates a sense of belonging for the customers and also encourages them to spread the word about how much benefit they get as customers of the company. During the loyalty program, you can choose to reward your customers by making them brand ambassadors and duly giving them incentives that are commensurate with the position. This engages the customers and makes them feel more acquainted with your brand.
One of the aspects of businesses that keep customers coming back is the unique service that has to do with human interaction with customers. For instance, your unique customer support system could be the reason a client stays loyal to your business. He enjoys calls with the customer care personnel and feels totally secure with the brand.
For an accurate assessment of customer retention rate, use key performance indicators (KPIs) like customer lifetime value and net promoter score (NPS). They help you keep track of the strategies that work best and know what aspects to focus on to improve the results.
In a nutshell, customer retention requires smart artistry and not just generic methods that have proven ineffective in the past. From the points mentioned above, there are many strategies that help boost the customer retention rate of any company; however, while employing all the strategies above, you must also use specific KPIs to measure the strategies that work best for your company. When you find them, optimize them to get the best results.
You should also know that success is achieved through consistent effort. Therefore, don’t expect to get immediate results when you start working out these strategies. Instead, monitor your results using the KPIs and make sure they are progressive.