We all work very hard to grow our business and focus on adding new clients. But, many fail to retain the customers they already have. The average business loses around 20% of its customers annually simply by failing to implement effective customer retention strategies. In the case of few industries, this number is as high as 80%. It’s a heavy loss. But few businesses truly understand the value of customer retention. According to a recent research, it’s around 50% easier to sell to your existing customers than a new one. While building many strategies to acquire new customers, putting your existing customers on the back seat could be a disaster for your business.
Let’s take an example of two e-commerce start-ups. One of them retains 90% of their customers, while the other one retains 80%. If both of them add new customers at the rate of 20% per year, the first will have a 10% growth in customers per year, on the other hand, the other will have none. After 7 years, the first one will virtually double, while the second one will have no growth. That 10% advantage in customer retention resulted in a double of customers every seven years without investing much.
A good retention strategy can also compound over time, and in sometimes unexpected ways. Even a small change in your customer retention strategy can effect on long-term profit and growth.
There are a number of simple customer retention strategies that will cost you a little or nothing to implement. Apogaeis followed each technique listed here step-by-step that has increased our customer retention significantly, and we are sure this will help your business to retain most of your existing customers. We believe “The best way to grow your customers, is not to lose any of them.”
Importance of Customer Retention
If you want to grow your business bottom line, customer retention will play a vital role in it. Even if you can retain 5% of your customers, it can increase your business profitability by 75%. Attracting new customers will cost you more than retaining existing ones. So, always remember while new customer acquisition is important, customer retention should always outweigh it.
Usually, sales team do an excellent job in making initial sale, but after that they drop the ball & move to the next court for a new start. But actually sales start when someone signs a sales contract with you. You need to strike while the iron is hot to explore more future opportunities from the same client. That might be referrals as well as repeat business. But the bottom-line is you must an excellent service provider. You should thank your customers and remind them why they have made a wise decision by choosing you. Create a system consist of unmatchable customer service and trust- where you can sell again and again.
It’s not always about sending a project status report to your client. Building relationships and keeping in touch with them using a communication calendar is always a good idea. You have to set a communication calendar which consists of letters, emails, phone calls, events, special offers, follow-ups, cards, notes, thank you notes etc. with a personal touch.
The communication calendar should follow a gap between presales, during sales and post-sales. Customers not only respond to this, they really appreciate it and will feel valued and important for your company. A regular communication will acknowledge them, keep them informed, support during a project, and makes them feel part of your business.
Every business loses few customers, but few of them try to analyse the reason behind this & work towards implementing business strategies to retain customers. Most businesses invest a huge amount of time, effort and money in building the initial customer relationship, and then they let that customer go unattended. Few of them also lose interest as they think sales are over. The best way to grow your business is not to lose your customers. If you are able to keep your customers happy & reduce the attrition rate, it’s often possible that you can double or even triple your growth rate.
Something is there which will always be above anything related to your business and business goals- Ethical commitments. Long term success and customer retention highly depend on this factor. There must be a consistency between what you say & what you deliver. The design, quality, reliability and durability of your service or product must match the customer expected standard. Service integrity is also displayed by how you address small things as well as complex things. Customers will appreciate you if you are open and honest, take interest in their business and practice what you promised.
Re-engage Customers by using Automation
Automation is allowing some of your routines to be handled automatically be a software. The most popular automation tool is marketing automation. Keeping a track of your customers manually is time-consuming. In order to make your process smooth and brand fresh, you need to re-engage your customers by using automation. Data quality and integration are one of the biggest challenges. You can see a boost in conversion rate as you engage customers and also you can communicate stronger and faster through automation.
A Community of your Customers
You can retain many of your valuable customers by socializing with them & by making them a part of your social media community. If you can do it right- this is going to be a key strategy. Provide a platform where your customers can connect with each other. They can build a good traffic for you. After you get good traffic and get more followers, stay engaged with them. Pay attention & increase your response rate. Face the complaints & help them in finding solutions. Identify most engaged customers & send personalized emails thanking them. Appreciate them with discounts & offers. If you are able to implement a dynamic Customer Engagement strategy, your social media savvy customers can become your most influential brand ambassadors. One small mail to your customer’s mailbox can do miracles.
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68% of the dissatisfied customers don’t complain. They just walk away and you can never know the reason. That’s because mainly often they don’t know how to complain, or don’t believe it will make any difference. While they may not tell you what’s wrong, they will certainly tell many others. So, customers who are giving you reasons to improve or even complaining- those are gifts for you. Accept your service lacunas and address complaints. It is an opportunity for you to fine-tune your overall quality. This will surely be going to increase your customer loyalty and enhance retention rate.
Use the Words your Customers love to hear
Always remember, there are certain words which encourage customers to buy more. Choose your words carefully while promoting your business. Words like “FREE”, “NEW”, “OFFER”, “REWARD” are very popular among customers. When they hear these words, they feel more comfortable and spends more time on your website or app. Moreover, they will enjoy their purchase more & will return for another purchase soon.
Don’t Sell, but Educate
As per many business leaders and serial entrepreneurs, if you try to sell at first time to a customer, they will never come back to you. Sale is often more effective for a repeat customer, whom you already served before. But if you want to acquire new customers, try to educate them about your product and tell them how it can add value to their everyday life. This will help you achieve better results.
Build KPIs around Customer Service
A great way to improve customer retention is to improve customer service. 68% of your customers leave because they are dissatisfied with the service. You need to build key performance indicators around your service offerings. You can measure the performance level of your employees as well as the service standards. By carefully studying your key performance indicators, you can tell what gets your customers excited or unhappy. KPIs are equally regarded as a roadmap. Because they help you visualize what the future holds for your business, and what direction you should be taking.
Customer churn can be avoided by simply listening to your customers. Customer feedback surveys are invaluable for learning how your service is performing in relation to your clients’ expectations.
You should monitor customer feedback on an individual level. Comparing feedback across a broad range of customers would be a waste of time. You must narrow the data down to a specific client, see what that client thought, and take action from there.
Then, you need to trend feedback across a period of time. You should track feedback survey to survey so you can see which areas have improved and which have suffered.
Finally, you want feedback from customer surveys to provide intelligence. You need it to provide you with data regarding what customers are at risk, which areas of your business need improvement, and where your strengths lie.
This feedback will help you retain customers. By understanding customer feedback, you can take action before it’s too late and make business decisions based on real data-driven feedback.
Go an Extra Mile
The best way for you as a business owner to stand out is by going an extra mile as often as you can. In fact, it should become a mantra within your business that every employee adopts and works towards.
- Write a letter to thank each of your customers for making their first purchase.
- Follow your customers on social media (Twitter is the best for this) and engage in their conversations. Your aim should be to provide help in any way you can.
- Record all customer feedback, complaints, and social media communication and use this information for engagement opportunities.
- If you see cases where customers are referring their friends or mentioning you on social media, go out of your way to thank them. Be personal and thank them each in a unique way.
- Leverage your VIP/loyalty program and thank customers who have impressed you either from a sales or word-of-mouth marketing perspective.
- Follow up with all complaints, even if they are resolved quickly. Showing that you care and want to make sure everything is taken care of is going that extra mile.
These are few of the key points which you can follow to maintain an excellent customer retention ratio. Beside this there are many other strategies which you can follow on your own. There is no secret magic behind retaining customers. However, communication plays a very crucial part in customer retention. Keep your customers engaged, work hard to meet specific needs and prioritize customer service. A mixture of all these strategies should result in high customer retention. Ignoring you existing customers can impact your revenue sources.
Hope you like this Blog. In our next blog, we are going to highlight more customer retention tips for your business. Any suggestion, feedback you can put in below comment box. Contact Us today for a FREE CONSULTATION on customer retention strategies.