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Customer retention

Customer retention is never an easy feat. It is a critical part of the customer lifecycle marketing strategy and the sustainability of a business, as it keeps existing customers engaged with your brand and generates revenue from them. It is cost-effective and great branding exercise to satisfy your customers so that they become your brand ambassadors and advocates.

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Businesses tend to use several tactics and strategies to build trust and customer loyalty, stand out from competition, and ultimately turn first-time consumers into repeated ones. When implemented and done right, it allows a business to increase its profitability and achieve its goals. And according to KPMG“The businesses that understand the importance of effective retention marketing, consciously invest in customer retention plans because they see it as the biggest revenue driver.”

Powerful Customer Retention Strategies to Grow Your Business

Customer retention strategies

1- Provide a positive customer experience

Providing good and efficient customer service plays a crucial role in customer retention. The service and experience a customer has during a purchase will determine whether or not they’ll continue to support your business. So, for example, offer omnichannel support to accommodate a range of communication preferences, reach customers where they are, and empower them to choose the channel they like the best.

These channels include phone support, chatbots, emails, live chats, as well as social media platforms; they deliver customer support 24×7, interactive real-time experiences to your customers, and have a great impact on customer satisfaction and retention. 

2- Stay in Touch

Communicating and staying in touch with customers are key drivers in keeping customer retention high. You can use emails and other communicative channels as means to build positive relationships with your customers. For example, send emails or SMS for declaring special offers, product or service updates, new collection arrivals, or greetings. 

Also, show customers that you care about them and their opinion, for instance, ask them for their feedback, consider their opinion, discover through engaging questions what they like or dislike, and always listen to their complaints, issues, and needs.

3- Appreciate Your Repeat Customers

Appreciation is a strong motivating factor that goes a long way in retaining your existing customers. Thanking them for choosing your brand, recognizing loyal customers by their names, and asking them for their feedbacks shows that you value them as well as their opinion and appreciate their purchases.

Customer retention_repeat customers

In addition, you can add them to the VIP list for receiving a special offer, or even offer them coupons and discounts on products they usually purchase along with a short and nice message from the customer service team.

Appreciation doesn’t always have to be in the form of discounts or offers. For example, you can send them birthday cards, vouchers, thank you notes, sneak previews, or even free products.

Another way to show gratitude towards your customers is by offering them surprise rewards. For example, offering them VIP cards, discounts, or gifts when they are not expecting helps to encourage them to buy again as well as elevates your brand.

Master Card expertly used this strategy to reward loyal customers by sending cardholders free surprise gifts of cupcakes, concert tickets, and VIP celebrity meetings.

4- Respond to customer’s queries quickly

Customer retention_customer care

Fast replies have a significant impact on customer satisfaction and thus retention. 59% of customers are more likely to buy when brands answer their queries directly. So, if you market a product or service don’t take too long to respond to customer dilemmas because an immediate response helps to convert more sales and is more likely to retain customers with your business.

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In addition, if you weren’t able to reply to customers instantly, just implement live chats as they demand immediate response when it comes to customer service.

5- Make the most out of social media

Social media channels are extremely vital in maintaining and retaining customers. They offer great opportunities to build trust and engage with your customers through sharing stories, videos, and images, running giveaways, rewarding loyal customers, and acquainting their opinions, interests, and motivations.

Also, social platforms provide an arena for consumers to ask questions, solve their queries, register complaints, share their opinion, resolve product issues, report a problem, and other actions which helps to show that your brand is a caring and supportive business.

6- Keep your products and services top of mind

Retaining and gaining customers to your side where competition is high is never an easy task. Customers want to deal with an active, well-rounded, and authentic business and not with a cold corporate. 

So, the key is to make them feel like a part of your team by sending them weekly emails, SMS, and notifications that keep them up-to-date on new developments such as new product lines, collections, partnership, occasion celebrations, offers, or exciting milestones for the company.

7- Take responsibility

When customers have problems or purchase from your products and it doesn’t meet their expectations, take full responsibility. For example, admit to your mistake, explain what happened, apologize if necessary, and compensate. This policy lets customers trust your brand, and see that you are willing to correct your fault and prevent future mistakes or misunderstandings.

WHY IS CUSTOMER RETENTION IMPORTANT?

Customer retention is a major boon in driving repeat purchases and fueling your sales. Ensuring consistent assistance, equipping your team with tools to deliver an extraordinary customer experience, and keeping your current customers satisfied are generally more cost-effective than acquiring first-time customers. 

Customer retention and customer acquisition

And according to the Harvard Business Review, acquiring a new customer can be five to 25 times more expensive than holding on to an existing one. So, converting first-time buyers into loyal customers towards your brand, engaging with consumers, and making the purchase process as frictionless as possible helps a business to gain traffic as well as profits.

Also, customers can turn into brand advocates. For example, if you reward customers with special or surprising gifts, discounts, or free products, they might share their experience with their friends, or even post them to social media, increasing your exposure which can help attract new customers to your business.

Customer Retention Statistics

Customer retention statistics

Here are some more statistics that demonstrate why focusing on customer retention is vital to your business:

  • Poor customer service would convince 39% of people never to use a company again and 37% to change suppliers, according to research from New Voice Media.
  • Temkin Group found that 77% of customers would recommend a business to a friend after having just one positive experience.
  • According to data curated by Harvard Business Review, onboarding a new customer is somewhere between 5x and 25x more expensive than retaining a customer you already have. And with a simple five percent increase in retention rates, you can grow profits by 25 to 95 percent.
  • One study showed that after one purchase, the customer is only 25% likely to buy from your company again. However, after two purchases they were 45% more likely to make a third purchase, and after three purchases, they were 54% more likely to make a fourth. Repeat customers always make up a substantial portion of an organization’s profits, and the more times they buy, the more likely they are to buy again.
  • According to the guide Marketing Metrics, the success rate of selling to an existing customer is 60-70%, while the success rate of selling to a new customer is only 5-20%.

WRAPPING UP

Customer retention has a significant impact on the success of a certain business. With no doubts, having the right customer retention strategy strengthens your relationship with your customers as well as boosts your brand. Your customers will find their way back to your business and become repeat buyers. 

Thus, make sure your customer support team is well-equipped and your services are consistent with the brand image you want to convey, as well as your customers’ expectations.

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