Customer retention is crucial for a company’s long-term viability. If you’re a business owner who doesn’t focus on customer loyalty and customer-retention plans, you will have to focus a disproportionate amount of energy on winning new customers. Over time, this is detrimental to your business’s finances. After all, it costs 5 times more to acquire a new customer than it does to keep an existing one. Focusing on customer retention is a much more proactive and cost-efficient strategy than dealing with customer turnover. Loyal customers keep the revenue flowing; they’ll spend 67 percent more than the occasional buyer.
In a time where consumers have more choices and options than ever, customer retention is no simple task. It takes a lot of energy and strategic initiative to establish and maintain a healthy customer base. To that end, here are a few methods to boost your customer retention rate.
Notice “churn” signs in advance
The most obvious way to ensure customer retention is to prevent a customer from leaving. A customer churn rate indicates the number of customers who leave your company during a given time period. Essentially, it’s a key indicator of how well you are at customer retention. If you properly assess some of the key variables of customer behavior, you can usually detect the signals of a customer’s impending departure. For example, 47 percent of consumers take their business to a competitor just one day after an instance of a negative customer service experience. To decrease these experiences, identify an area in your sales process that’s negatively impacting retention, whether it be in your messaging, product quality, price or customer service. You may want to consider communicating with customers through social media, a survey or a phone call. Such communications are an instantaneous way to gather feedback and improve churn rate.
Create a community around your brand
Online communities have been proven to build trust and familiarity among customers. They connect your loyal customers and allow them to communicate with your business and each other about product launches, experiences and brand interactions. It provides a platform for your customers to share their ideas, but also gives you a place to connect with them and receive feedback. As Emily Weiss, founder and CEO of Glossier, a brand known for its online community, tells the Business of Fashion, “Sixty percent of Americans rely on peer-to-peer recommendations on whether they decide to buy a… product,” even if it’s someone on social media they’ve never met before. An online community ties your customers to the brand, even when they’re not considering a purchase. It keeps your brand top of mind, so you’re the first option they think of when it’s time to to make a purchase.
Support your customers…even after the sale
One of the main ways that businesses lose loyal customers is by neglecting post-sale customer service. Not only should you provide assistance to your customers while they’re in the purchasing process, but you should be equally as invested after the sale. As CEO Mark Hurd indicated in one of his interviews with Forbes, “Improving service is typically the quickest way that [businesses] can take market share.” Whether your customer service team reaches out to customers for post-purchase feedback, or you simply implement a lifetime warranty, pay close attention to your customers after the sale. Just because your customers have completed a purchase, don’t forget about them. Let your customers know you are there for the long haul.
Reward your most profitable customers
Rewarding those who regularly engage with your brand is a great way to show your customers how much you value their loyalty. Running giveaway campaigns and giving out coupon codes are great ways to reward your customers, especially if you can integrate it into your business’s reward program. For example, clothing brand American Eagle offers its rewards members a free pair of jeans for every five they purchase. This not only encourages repeat business, but it shows your customers that you’re appreciative of their consistent purchases. Even a simple gesture like mentioning a customer in a social media post and recognizing or acknowledging their ideas is often more than enough to make their day.
Although gaining customers is a sign of business growth, there more telling metric is how well you can retain them. If you learn to put the customer first, chances are your customers will stick around and become more loyal as time goes on. Take action on these tips and use them to benefit customer retention and increase revenue for your business.