Why Is Customer Retention So Important?

Here are some cold hard statistics to explain:

• It costs five times more to acquire a new customer than to retain an existing customer.
• The chance of selling to an existing customer is 60-70%, while selling to a new customer is only 5-20%
• Existing customers spend 67% more on your products and services than new customers.
• Increasing customer retention rates by just 5% will increase your company’s profits by 25% to 95%.

As you can see, a lot is riding on customer retention, which makes it crucial to develop a formal customer retention strategy for your business. When you strategically plan and incorporate the best practices to retain customers, you’ll see your customer retention rates increase dramatically.

Keeping your existing customers happy to retain them is the most cost-efficient way to grow your business. Even small improvements in customer retention can have a dramatic impact on your company's bottom line. 

So how do you create a retention strategy that keeps customers happy, engaged, and keeps them coming back to repurchase? 

5 Customer Retention Strategies

These will help you increase your company's profits by working smarter, not harder. 

1. Make Customer Experience a Priority

Customer retention boils down to customer service and experience. If you consistently create a great experience for your customers, you have a good shot at the customer becoming loyal to your brand. The entire buying experience impacts your customers’ perception and their decision to buy from your business again or not. 

Customer experience includes all the touchpoints with your brand starting from website navigation, customer service interactions to completing a purchase. Keep in mind; loyal customers are your biggest asset since they always come back to buy from your brand. 

Nobody likes to struggle to navigate a website; if your site is difficult to view your products and make a purchase, you can be sure your visitors will leave without purchasing and not come back. You will waste all the effort you put into getting the visitor to your site. 

A website that is easy to navigate with a simple process to add items to a cart and complete purchase is necessary to convert your visitors. It also adds to their buying experience. Even the proper eye trail on your website is critical to turn a visitor into a customer.  

2. Maintain Consistent Multichannel Customer Service

Customer service is also a huge part of the customer experience. When customers have questions or issues, they want friendly and helpful service quickly and any problems resolved with minimal interactions. Customers, especially millennials, want service through multiple channels, including online chat, social media, phone, SMS, and email. 

If you are not servicing your clients through multiple channels and fast, you can be sure your customer experience isn’t going to be great, and retention will decrease. Companies that provide exceptional customer service have higher retention rates and get more referrals than ones with mediocre or poor service. 

If you don’t have the workforce in-house to provide awesome first-class service quickly, invest in a customer service agency to ensure your clients are satisfied. 

Let’s face it, with the internet so easily accessible, many people do their shopping online and whenever they want to, including when your business may be closed. If they have to wait for your business to be open the next business day, they may just move on to buy from your competitor. 

So having service available when your customers need it is necessary with today’s competitive market. The truth is, satisfied customers will tell around nine people about their positive experience with your brand, while dissatisfied customers tell on average 22 people about their bad experiences. 

Considering that, invest in your customer service to increase your retention rate for the success of your business. 

The days of the super-serious monotone service agents are out. Instead, your customer service agents should be upbeat, personable, friendly, but still professional and be able to solve the customer’s issue quickly. Your service agents should engage with your customers, listen, and empathize to make them feel valued and appreciated.

Quick tips on providing great customer service:

• Respond to customers quickly. When a customer has a problem, they want to speak with a real person, not an answering machine or a bot but a real live human. Searching for answers on a website or needing to interact with a chatbot typically fails to address the unique needs and results in a frustrated customer.
• Fix your problems. When a customer brings a problem about your products and services, listen to them so you could fix the issues so they don’t continue. Even if it’s a minor issue, if it’s fixable, do it as it will make your customer feel heard and appreciated. 

3. Target Customers With Special Offers

Creating an automated email funnel to your customers can personalize the messages and offers to make them feel special and get them back to repurchase. Everyone loves a good offer, and if it’s attractive enough, you will get your customers coming back to buy more often. You could also target your prospects with personalized offers to entice them to buy. 

4. Create a Loyalty Program

Loyalty programs are relatively inexpensive to implement but can greatly increase a customer’s lifetime value, so they should be a part of your retention strategy. Giving your customers special offers and rewards, makes them feel good about purchasing and motivates them to keep coming back, which increases your retention rate. Also, an effective loyalty program helps you identify your brand ambassadors, your loyalist’s customers who are most likely to spread the word about your business. 

You could then more effectively personalize your outreach to these loyal customers.

5. Send Surveys

You know the old saying, ask, and you shall receive? Well, that is true when sending surveys. You are asking for feedback from your customers on what they thought about their experience with your brand. If someone had a bad experience, they just might never come back, but you won’t know why unless you ask. 

When you get the feedback, you have the opportunity to fix the problem and win your customer back. It also makes a customer feel like you do care about them and what they have to say. 

You could simply send the surveys via email after they purchase. However, if you wanted to dig in deeper to get more feedback on your service, you could use CSAT or NPS. Most importantly, you really need to read them and take the feedback seriously so you could finetune your customer experience to provide flawless 5-star products and services.

The Takeaway

The most cost-effective way to grow your business is by retaining your customers and keeping them happy. When you effectively implement your customer retention strategies, you will see it dramatically impacts your company’s bottom line. Of course, getting new customers is important for company growth, but remember your loyal customers will also refer others to you and give you positive online reviews to bring you new prospects organically. Also, referrals close at a higher rate than other leads, so they are awesome warm leads to receive. 

The great news is if you’ve already done the hard part of convincing the customer to buy once, all you have to do now is give them incentives to come back. With a bit of effort, these customer retention strategies will help you gain more brand ambassadors to get people talking about your exceptional service and grow your business without spending a fortune on marketing. 

Remember, your existing customers will spend more with you than a new customer, so focus on providing first-class personalized service to your customers and watch your revenue grow!  

Are you ready to implement these customer retention strategies so your company is known for awesome personal service and has a high retention rate with growing revenue? We’re Awesome CX, and we are customer service experts with an award-winning track record for providing exceptional service. We will provide the stand-out service your business needs through all the channels used today, including phone, live chat, social media, SMS, and email. Contact us today, and we will show you how awesome we are! 

Sources:

Don't Get Lazy About Your Client Relationships | Forbes

Businesses Lose $75 Billion Due To Poor Customer Service | Forbes

The Best Hiring Practices for Customer Service | Business.com