Why is customer retention so important?
Companies focus more on customer retention than they do on acquisition. There is a good reason for that as well – retention is generally more profitable. Simply going over a few statistics will help you understand why businesses go for retention.
It is 7x cheaper to retain your customers than to acquire a new one. Investing 5% more in your customer retention increases your profits by 25%. These generalistic figures vary from industry to industry but customer-centric businesses profit the most from retention.
Social media marketing and ecommerce experts suggest that most industries retain only 20% of their customers. This is the biggest challenge that companies face. Even the biggest names such as Amazon and Adobe face cart abandonment issues. This may be due to various reasons including unprecedented shipping rates and trust issues in payment options. The goal remains the same for all though – increasing customer retention rates and building brand loyalty.
Customer retention strategies that work
Strategizing is an important factor in any marketing portfolio, be it social media marketing or search engine marketing. Customer retention strategies, are therefore, intertwined with social media and search engine marketing strategies. To begin with, we have enlisted some of the evergreen practices that help companies retain their clients.
Your quality of customer service and support directly impacts the customers’ perception. How you deal with the customers’ queries and complaints is really important. To ensure that your customer retention goes up, it is crucial that you invest more into the quality of customer support. Many companies employ virtual assistant to help them do this.
For service businesses, customer support software is even more important. Did you know that customers are willing to pay more to get a better experience even if the product or service is not that pricey?
Customer service channels should be chosen with care. They should have a symbiotic relationship with your product or service. For example, a company that manufactures and markets apparel for teenagers should go heavy on social media such as Instagram. For B2B outfits, Linkedin and a dedicated web application is more viable. Other customer support channels such as emails, phone lines, chatbots, etc. are also effective. It depends on your product/service as to which channel you use to communicate with your customers.
Your customer service can be enhanced by doing the following:
Pay attention to what the customer says
Ensure that your customer feels attended to and cared for. Even if they had a bad experience with your product or service, they might still be willing to do more business with you if the customer service is good.
Give them multiple options
Your company should be accessible via multiple channels so that the customer is never left unattended or made to wait. Multiple channels also give the impression that your company takes customer service seriously and has a good infrastructure.
Categorise and connect
It is important that your customers are connected with the right representative to solve their problems. Your customers should be in touch with the most skilled representatives who know exactly what they are dealing with.
Invest in customer surveys
Knowing the market is not only crucial to your customer retention but also helps in developing marketing strategies. Social media channels are great for conducting these surveys. Ask relevant questions that involve the visitor and interests them. You can also use your website to run these surveys. However, make sure that your surveys are not lengthy and feel ‘natural’. Also, surveys shouldn’t be overused. The customer should not feel like they are being interrogated.
From your point of view, customer surveys are meant to gather relevant data about the market. Things like demographics, market interests, behaviour, etc. are only some of the parameters that you can work on via customer surveys.
Discounts and offers
Discounts are one of the best ways to retain your customers and reward them for their loyalty. This even works for customer acquisition. Many ecommerce platforms offer heavy discounts on your first purchase. Cart abandonment issues are also solved to an extent by providing discounts.
Surprise gifts are another way to treat your customers and keep them happy. Putting in a small gift in a delivery order will surprise the customers and make them feel cared for. You can roll out special offers and gifts including cashbacks and nifty gifties to customers who have stayed with you for a long time.
Rewarding customers for staying loyal to your brand keeps the customer retention rates high. You can also make a hierarchy just like platforms like Twitch and Patreon do. Each level has different advantages. You can roll out special offers based on the level of subscription. Many companies also treat their customers on their birthdays or on national holidays.
Nurture a community
Building and developing a community of like minded individuals based around your product or service is also advantageous. Companies like Red Bull and Royal Enfield are prime examples of this. Royal Enfield not only sells bikes and apparel but also organises rides to scenic places. Look into how they have profited by hosting Himalayan biking events in India to understand how a community can help you retain and build your customer base.
Pairing with NGOs and purpose driven ideas is also trending these days. With global warming and other worldwide issues such as hunger and poverty on the rise, many businesses have taken steps to involve their customers in solving these problems. For every product you sell, for example, a portion can go to the famine in Yemen.
Purpose driven brand building when coupled with an aware and ‘woke’ community can do wonders for your business. Social media is a great way to educate your customers about these issues and to help as a platform for the community to interact and act.
Educating your customers about your product and communicating to them all the ways in which your business can help them is crucial. A team of good content writers, virtual assistants, social media marketing executives, designers, and creative individuals is key to developing an ‘educated’ customer base.
Last but not the least, rewarding customers for referring your product or service to another individual is highly advantageous. It helps you acquire more customers whilst keeping your old customers happy. ‘Gamifying’ your brand and keeping customers in an interactive mode helps them feel important. It is a win-win for all the players involved.
The probability of doing business with an existing client is around 60%. Compare this to the 5% – 20% of a new person. Customer retention is outright more beneficial for your business. All the big companies recognise this and make concrete strategies to help them increase their customer retention rates.
So what are you waiting for? Call in the best minds of your company and get started on developing some successful customer retention strategies. Make sure that you make the most of all the digital channels that you have at hand. Employ social media platforms to boost your reach and to keep your customers engaged. Within time, you will witness the positive results of customer engagement and building brand loyalty.