5 customer retention strategies that your business can use

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You may have heard of the term customer retention. It refers to the methods that businesses use in order to turn customers into repeat buyers.

According to Market Metrics, the success rate of selling to a new customer ranges from about 5%-20%. Comparatively, businesses have a 60%-70% chance of selling to an existing consumer. Unfortunately, retaining customers is easier said than done. In fact, 61% of companies state that customer retention is their biggest challenge.

While it may be a very complex task, there are some strategies that businesses can implement in order to increase the percentage of consumers that they retain. Here are 5 methods that any business can implement.

Actively listen to customer feedback

While 80% of businesses believe that the service they provide is superior, just 8% of consumers state that they received a superior service. This startling statistic suggests that the majority of businesses don’t listen to feedback from their consumers.

In this day and age, feedback can be collected in an exceptionally swift manner – Due to modern technology, companies can gain high quality feedback by looking at social media pages, discussion boards, and search engine trends.

Businesses should then be using this information to search for trends, patterns, and relationships, and therefore attempt to figure out what consumers are collectively demanding from the company.

Start a customer retention program

A customer retention program is essentially a business strategy that companies will implement in order to make them look more appealing. While the possibilities are endless, this article will explain two of the most commonly used retention programs;

  • Customer loyalty programs

Loyal customers drive repeat business, increase company revenue, and can ultimately act as brand ambassadors. Essentially, these people are invaluable from a brands perspective. With this in mind, it is highly recommended that all businesses introduce a customer loyalty program. These programs aim to provide past consumers with an incentive to return, often through discounts, exclusive access, or free items. Some high-quality examples of customer loyalty programs can be seen by looking at the business models of Starbucks, Amazon, and Apple.

  • Corporate Social Responsibility (CSR) program

The 2010’s saw a rapid rise in the number of consumers who emphasised the importance of sustainability in their purchase behaviour. As a result of this, many companies have started to focus on ways that they can demonstrate social responsibility. Through the use of CSR programs, companies can incentivise consumers through the promise of pursuing a moral goal. For example, Company XYZ may promise to donate X% of all profits to a certain charity.

Own up after making a mistake

Businesses are ultimately run by people, and are therefore prone to errors. Data breaches, logistics mistakes, and billing errors are all examples of common mistakes made by even the most sophisticated businesses. While these blunders may put your business at risk of losing loyal customers, an innocent gaffe can be corrected.

 HubSpot suggests that 96% of people would continue buying from a company that made a mistake on the proviso that they apologised, and rectified the situation. This suggests that making a mistake is, in most cases, not a big deal, providing that the business deals with it in the appropriate manner.

Implement a trigger-based e-mail system

While e-mail is still a powerful tool, there is no point spamming customers will irrelevant business updates that are in no way helpful from the consumers perspective.

As the name may suggest, trigger-based e-mails are automatically sent as a result of personal behaviour. For example, a loyal consumer who hasn’t made a purchase in 6 months may receive an e-mail encouraging them to return, and incentivising them with a personalised discount.

Due to the fact that they are personalised, trigger-based e-mails tend to have 5x higher open rates, and 15x higher click through rates when being compared to traditional e-mail.

Improve customer service

1 in 3 people will leave a brand they love after just one negative customer service experience. Conversely, 86% of consumers are willing to spend more money on a company that offers outstanding customer service. Some 2020 studies even suggest that customer service will soon overtake price as the key brand differentiator.

While these statistics are very confronting, the message is clear. High quality customer service is essential, and failing to provide it can result in a major loss in revenue, and loyalty.

With this in mind, it is essential that business owners properly train employees, and ensure that they are comfortable dealing with all kinds of organisation v client situations.

The bottom line

Implementing effective customer retention strategies should be crucial for any business, regardless of its size. If done effectively, companies can multiply their revenue, and substantially increase their consumer base. With this being said, customer retention is exceptionally complex, and strategies should be introduced with care.

If you enjoyed this article then you may want to read about 4 creative ways to organically generate more revenue.

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