What is more important than acquiring one new customer or client?
It is not getting new clients on board. It is retaining existing customers. According to a study online, retaining customers will result in greater ROI with a cost reduction of five to twenty-five times lesser. Even a KPMG report exuded the same information regarding customer retention and its importance for recurring business value and growth.
While bringing in new customers is hard, losing them is easy (and extremely costly). This makes customer retention critical so that a business grows sustainably. Customer retention is pivotal to maintain a Customer lifetime value which is a powerful metric that will lead to huge gains in revenue.
A customer retention program is a set of initiatives intended to enhance customer value and promote them to re-purchase a company’s offering. Customer retention starts from the sale, moves on to the onboarding process, and proceeds to be a lifetime initiative for customer lifetime value.
But how does one create a customer retention strategy that works to keep your customers engaged and happy?
The 4 pillars of customer retention
The basis of all customer retention strategies are 4 important pillars-
- Reducing customer effort
- Meeting promises to customers
- Delivering excellent customer service
- Keeping customers happy and satisfied
These pillars of customer retention are important to base all customer retention strategies on.
Top 5 Customer Retention Strategies that Work
1. Adopt customer service tools
Adopting customer service tools that will help you identify, track, and address customer concerns and queries are essential. With an effective customer success tool, you can notice churn signs in advance, detect warning signals, purchase patterns, and product usage. A good tool is one that uses customer data to feed important insights to customer service officers who can then retrace their steps to send appropriate messaging and prevent them from leaving. Implement a system that will collect customer feedback, make reports and act on it regularly.
2. Customer Experience Initiatives
When was the last time you received a surprise? Do this for your customers, create milestones in your relationship with them. This appreciation can go a long way in improving customer experience and creating a relationship that thrives on loyalty and respect. Attend to their needs, answer queries, find time especially during the current coronavirus outbreak and reach out. Fewer wait times, resolving questions, personalized messaging, and a great customer success team are vital to offer customers a wholesome experience.
Being open, upfront, and honest about your product is important for customer retention. When they know it is a relationship established on transparency, they feel more secure. Healthy conversations about ideas, strategies, and processes will keep customers supportive of your new policies or changes as well. Being open with your customers will also allow them to provide some leverage when you are not able to keep up promises. Ask for feedback with score surveys cause transparency is a two-way gate.
4. Educate your customers
Educate your customers about the product or service and the best tips and hacks to get the best value. Aligning customer expectations with product experience and creating the right product adoption atmosphere is a great way to maintain credibility. Under-delivering while over-promising is perhaps the easiest way to lose a customer. Making them love your offering, promoting it well, using the right product descriptions and explainers are the big runners for customer retention. Proactively offer guidance on product adoption and create a super simple FAQ sheet based on previous queries and feedback.
5. Incentivize Social Footprint
Clients are high potential returning buyers who come back. When they share that association in a time-sensitive manner, it is great word-of-mouth marketing. It is a sign of great customer engagement and amazing customer experience. A great customer retention strategy that brings you organic traffic, social proofing can be incentivised and rewarded. Rewarding the repeating customers will also increase chances of up-selling or cross-selling. Capitalize on this greatest form of advertising to build more trust. Use testimonials, customer stories, and small snippets to get the best social proof for your company.
Something brilliant is the H.E.A.R.D. acronym by The Disney Institute for customer retention.
- Hear the customer’s story
- Empathize with the customer
- Apologize to the customer if need be
- Resolve the issue quickly
- Diagnose the process
These five steps can be impactful in defining the course of your customer retention strategy and keeping your customers loyally invested in your product or service.
Final Take: Customer Retention is Vital for Growth
Improving customer retention boils down to creating and curating an effective customer experience that focuses on solving customer problems, keeping them engaged, being honest and creating an ecosystem based on trust. Apologizing when you make mistakes with customers is important to not lose out on value and trust. Saying sorry and Thank you when required can go a long way in customer retention. Making them feel special while focusing on the overall customer experience is important.
Image by Gerd Altmann from Pixabay