Do you feel like your customer retention strategy just isn’t cutting it? No one said running a business would be easy, but understanding the importance of customer retention and curating an effective marketing strategy for retaining loyal customers will put your business in a better position.
If your marketing tactics aren’t keeping your customers around and you’re struggling to hang on to customers who keep disappearing, it’s time to change up those tactics. A new marketing strategy is in order.
Fear not friends, today we will be unlocking the secrets of customer retention and giving your business a custom-made edge to keep those valuable customers coming back for more.
Grab your favourite branded coffee mug and get yourself ready for some of the best tips and tricks of 2023 to ensure your loyal customers keep returning with smiles on their faces.
What Is Customer Retention?
If you want the short version, customer retention is the art of keeping customers coming back for more. If you want the detailed version, customer retention is the process used within a business’s marketing strategy to obtain their customers as repeat buyers and avoid losing them to competitors. If existing customers are satisfied and happy with your products and services as well as your brand image, they are likely to return to your business.
It may sound simple enough, but retaining loyal customers comes with many challenges and should be at the top of any business’s priority list if they want to survive in today’s market.
Why Is Customer Retention Important?
Aside from satisfying your existing customers and letting them know they’re appreciated – customer retention has serious benefits that can greatly impact a company’s bottom line.
The cost of acquiring a new customer is significantly higher than keeping an existing one, meaning more time and money invested in retaining previous customers pays off handsomely in the long run.
According to Bain and Company, statistics show that increasing customer retention by as little as 5% can lead to profits ranging up to 95%.
Some other valuable business assets that come with smart customer retention strategies include:
- Improved brand reputation and brand awareness
- Increased market share
- Better reviews
- Enriched brand identity
- Enhanced brand positioning
By keeping customers loyal, businesses can save money on marketing and sales outreach costs, as well as gain a deeper understanding of consumer needs and wants.
It is up to 7 times more expensive to focus your marketing efforts on acquiring new customers. So do yourself and your business a favour by saving time and money and focus your good intentions on satisfying the customers you do have.
The Challenges Of Customer Retention
The world is constantly changing and trends come and go. People want better quality products, products that offer them more for less and products that keep up with the times. Although strategies for customer retention face many difficulties, there are businesses worldwide proving that customer retention is not impossible. They’re also proving how beneficial customer retention is for your return on investment (ROI).
The biggest battle in this regime is to guarantee customer satisfaction and maintain a high level of top-quality services and products at all times.
Here are some of the most common challenges faced in obtaining customer retention:
- Below-average customer service
- Meagre customer experience
- Weak or no loyalty rewards
- Disengaged customers
- Substandard training and resources
- Products lacking in value
- Messy marketing funnel
Research your current customers to find out what they want from your products and services. Implement strategies to bring customers back to your store over competitors by making your products compelling to their needs. Be the solution to your customer’s problems.
By making small yet effective changes over time it is possible to achieve customer loyalty in a way that will compel consumers to come back for more.
10 Actionable Customer Retention Tips
1. Make Your First Impression Count
You only have one chance to make a great first impression, so make it count! Studies have shown that it takes just seven seconds for someone to form an opinion about you, so it’s necessary to make sure that your first impression is a positive one. The impression you give a customer is just as important as the quality of the products and/or services you offer.
2. Be Consistent In Customer Service Training
Customer service is the key to keeping your customers happy and loyal. Qualtrics XM Institute research shows that only 30% of consumers are willing to forgive a company after a bad experience. Consumers who enjoy the customer service they receive when dealing with a business are five times more likely to recommend their brand to others.
It is essential that all employees are trained adequately in customer service and that they are always ready and willing to help your customers with whatever they need.
3. Personalise The Customer Journey
In today’s digital world, it is easy to forget the importance of a personal touch. However, studies have shown that customers appreciate when businesses take the time to connect with them on a personal level. Whether it’s through social media, email, or even a phone call, stay in touch with your customers.
According to Investopedia, personalised email marketing is the top-most effective strategy marketing teams use for customer retention.
4. Be Responsive To Complaints
No business is perfect, and there will always be times when things go wrong. It’s how you handle those situations which will determine whether or not you retain your customers. Respond quickly and efficiently when a complaint comes in because the sooner you can resolve the issue, the better.
Whether or not you are wrong, always begin with an apology for the situation at hand and advise that you have every intention of resolving the issue cordially.
5. Implement A Rewards Program
Loyalty and rewards programs are what drive many customers to return to a business.
Offer discounts, coupons, or other perks to customers who frequently purchase from you or refer new business your way. Rewards programs that offer customers value for their purchase and time show them that you care about them as a customer and that you want them to return to your business.
Some great examples of loyalty rewards programs are Qantas’s points programs, Woolworths Everyday Rewards program, and Starbucks stars program.
6. Get Your Business Name Printed On Promotional Products
Need help getting started with leveraging promotional products to improve your customer retention rate? Promotional product experts like Payless Promotions have a wide range of products that suit every business in need of promotional marketing products.
Simple yet effective and useful products like USBs, pens, hoodies, hats and drink bottles printed with your logo are free word-of-mouth advertising. Better yet, this type of advertising can reach people Australia-wide and even further. According to numerous studies, promotional and branded marketing drastically increases a company’s brand awareness.
7. Hire An Influencer For Word-of-Mouth Marketing
Word-of-mouth marketing is still one of the most powerful marketing tools available. It is the most effective marketing tool you have because 86% of consumers trust the word of mouth marketing from people they know and respect above other forms of marketing. Hiring an influencer that can relate to your target market is a great place to start.
8. Ask For And Respond To Customer Reviews
Customer reviews can make or break your business, so it’s important to pay attention to what people are saying about you online. If you are yet to receive any online reviews for your business, ask customers when they come in if they wouldn’t mind posting an honest review for you.
Respond promptly and professionally to any negative reviews, and take steps to ensure that future customers have a positive experience as well
9. Pay Attention To Trends
Keep an eye on industry trends so that you can anticipate changes in customer needs and desires. This will allow you to stay ahead of the curve and keep your offerings relevant. For example, if there’s a trend toward healthy eating, try to offer healthier options. If there’s a trend toward environmental consciousness, try offering products or services that are eco-friendly. Paying attention to trends will help ensure that your products or services are always in demand.
10. Make Doing Business With You Easy
If you want to keep your customers, you need to make it as easy as possible for them to do business with you. This means having a user-friendly website, clear and concise customer service, and easy payment options.
To put this tip into perspective, 67% of baby boomer consumers prefer convenience over brand names while 76% of Generation Z consumers prioritise convenience over other aspects of their purchasing trends.
What Is A Good Customer Retention Rate And How Do You Calculate It?
While there is no industry standard for the perfect customer retention rate, anything over 70% is considered very good, showing a high level of customer satisfaction. The best customer retention rate is around 80%, meaning for every 10 customers you acquire, 8 of them make repeated purchases
Your retention rate is the number of customers at the end of a period, divided by the number of customers at the start of a period and multiplied by 100. You can check out this tool by Zen Desk to help you learn how to calculate your retention rate.
Knowing how many customers you keep over time is crucial for creating a healthy and thriving business.
Enhancing Customer Retention By Improving Consumer Journeys
If you’re looking to decrease customer churn and increase brand loyalty, now is the time to start paying attention to your retention rate.
Make your marketing efforts worth it and focus on the above tips to help you retain loyal customers. Save time, money and energy when you put your effort into designing the best experiences for your current customers.
Create a desirable loyalty program, offer branded products, enhance your customer service training and start learning what your customers really want from you. You won’t regret it when you see improved results in customer retention and loyalty.
