Although understandably, most organisations focus on acquiring customers, the painful truth is that it is five times more expensive to acquire a customer than to keep one. Acquiring new customers is a costly endeavour. That's why it's so important to focus on customer retention - not only is it more cost-effective to keep your existing customers happy, but satisfied customers are also more likely to become brand advocates and help you attract new business.
A study done by Bain and co. says that a 5% boost in customer retention rate can show a 95% increase in the company's profits. That’s because loyal customers are more likely to make larger purchases, refer friends and family and provide valuable feedback, allowing you to improve your product and service. It becomes a virtuous circle. In addition, repeat customers are also less expensive to service than new customers. They call contact centres less often; they don't ask for credits. They are generally just happier and less needy. As you can see, investing in customer retention is a wise decision for any business.
In this blog, we shed light on the 10 top customer retention strategies that will maximise the growth potential of your business.
Ten effective customer Retention strategies your business needs
By following these simple steps, you'll be well on your way to building long-lasting customer relationships that will drive your business forward for years to come.
1. Make customer experience (CX) a strategic priority.
Organisations have spent the last ten years extracting efficiencies and process improvements out of every organisation sector. However, information that your customers have at their fingertips changes the relationship between supplier and customer. Customers can change to your competitors quicker and with greater ease than ever before. Only by focusing on customers to make their experience with you consistent, seamless and enjoyable will organisations maintain customer loyalty and profitability.
2. Respond to customer issues instantly
One of the biggest bugbears of customers is that when they need a brand to assist them, nobody responds. Customers don't reach out to brands in their contacts because they wish to; they reach out because they have to. And at that time, organisations must have the processes to provide support in a reasonable amount of time. Along with relatively easy solutions to assist their customers in solving the problem and moving on with their life.
3. Create a well-tailored customer retention program
Brands spend millions of dollars acquiring new customers every year; however, they don't realise that acquiring a customer costs five times more than retaining one.
If organisations placed more resources and effort into retaining their customers, they would be more profitable and have far greater customer retention. By understanding what's most important to your customers, organisations can design a meaningful and valuable customer journey and ensures that their customers feel valued, buy more services and stay longer.
4. Implement customer feedback judiciously
Sourcing customer feedback from your clients and customers is one of the most valuable things a brand can do. However, there are a couple of caveats that need to be taken into account:
- When asking for feedback, do not ask a series of 10 or 20 questions of customers, which will provide less than meaningful insights too.
- Suppose an organisation implements a customer feedback system. It is essential that they listen to what a customer says, act on it, and then communicate improvements back to customers, so they know that their effort in responding to surveys is being put into an improved experience.
5. Deliver consistent omnichannel customer service
Even though organisations would like to believe that their customers follow a singular one channel journey to research, buy and then use their products and services. However, the reality is that customers cross over multiple channels and different parts of the journey.
Organisations need to understand how and when their potential customers use particular channels and then design those to allow customers to move from one channel to the next as they move through their buying journey.
6. Map your customer journey
Mapping the customer journey is one of the most important things an organisation can do. Too often, organisations' process maps the journey that they think their customer goes on. However, this is the ideal/perfect journey and reflects reality. The better way to approach this is to take an outside view of the journey and map all the interactions that customers have with the brand across processes, communications, and systems (like we did in the case of Sydney Metro).
It allows the brand to truly understand what is and isn't working and where interactions can be improved.
7. Create interactive content to educate customers
Organisations quite often misunderstand the value that they provide their customers. There is a core product that customers go to an organisation for. However, one of the primary reasons they stay with an organisation is because the brand provides support and education to assist the customer in achieving more from the relationship.
Investing resources in better educating your customers to achieve greater value out of their relationship with your brand. It will also increase customer retention and loyalty.
8. Build a community to enhance customer relationships
People are social creatures, and we naturally gravitate towards communities where we feel a sense of belonging. When you create a community for your customers, you give them a space to interact with others who share their interests and values. This helps them feel invested in your brand and makes it more likely that they’ll continue doing business with you.
A growing number of brands are investing in customer communities, which enables members to support and assist each other in ways that the organisation would never have dreamt of.
Organisations don't have to own the value supplied to customers, but they can undoubtedly facilitate it to increase retention and loyalty.
9. Keep track of customer retention metrics.
Organisations quite often focus on acquisition metrics which is understandable. However, of equal importance is to track custom retention metrics to show you where and why customers are leaving your business and how you can retain them.
Customer retention metrics often take the form of hard quantitative metrics. There should also be a range of softer metrics that are qualitatively driven and provide insight as to why particular customer behaviour is taking place.
10. Leverage employee engagement
Your employees have an enormous reservoir of knowledge as to why customers behave in the way they do. Speaking with customer-facing staff and understanding what they hear from customers as to what is essential is an incredibly valuable way of conducting customer research and quickly and easily improving.
One more thing, Happy employees = happy customers, which is why employee retention is so vital for customer retention. When employees are content and feel appreciated, they're more likely to provide excellent customer service.
How can a CX agency help?
Organisations, if given the option, would understandably prefer to improve their Customer Experience using internal resources in the first instance. But just like many things, getting your CX right and achieving a financial return sooner rather than later takes experience and expertise. External agencies have seen the same problem tens of times and, more importantly, will have a solution that can be implemented quickly and with far fewer resources than enthusiastic internal teams.
Bringing innovation and experience from multiple categories, which can be applied to the problem, brings forward time to value and time to increased customer satisfaction.
10 is a lot. We get it. You don’t have to do them all simultaneously, but start with a couple and see how they go. And if you need help getting started – or want someone to help guide you – Proto Partners can help you initiate, design and successfully execute your next customer retention program. Give us a call (or shoot us an email) today and let us show you what's possible!
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