Do you have a customer retention strategy that focuses on turning new visitors into loyal customers? If not, you need one urgently. Take time to think about customer retention and the benefits that you’ll enjoy. You’ll realize that increasing your customer retention rate has more benefits than just acquisition.
A comprehensive customer retention strategy needs to involve the entire journey that customers have to go starting from onboarding. In essence, there are several stages that you should follow to encourage repeat business from your current customers and retain them in the long run. These stages focus on keeping customers engaged with your products and investing in what your brand has to offer. All the stages need a clear plan to maximize customer value and ensure that they are kept engaged at all levels.
When creating your customer retention strategy, you should focus on three main stages to achieve your objectives. These three primary stages include onboarding, adoption, and renewals. These three stages will help you incorporate best practices into the onboarding experience of your customers, guide them in the adoption of your product, and promote renewals. Following the best practices in customer retention will optimize each stage of your customer experience and encourage referrals and repeat business.
Why focus on customer retention?
Customer retention allows you to increase your referral rates, repeat business, and revenue generation. Customer retention is essential because repeat business is the most efficient way of generating revenue in business. The marketing activities required to attract new leads and convert them to loyal customers require more resources than it takes to retain existing customers.
Studies show that marketing costs to acquire a new customer can be more than five times the cost of keeping an existing customer. This is mainly because current customers are more likely to buy from you than your competitors. Once a customer purchases a product or service from you and knows its value, they already trust your brand. And they will buy from you again.
Unlike an existing customer, a new customer has to be persuaded that your brand is worth buying. This means that the steps you take to boost customer retention will increase the efficiency of your marketing activities.
Customer retention is also effective in promoting referrals. If customers are satisfied with your products. And they have made a positive impact on their lives, they will naturally share it with others. Unlike marketing strategies like SEO and advertising, referrals will only cost you the effort of treating your customers properly.
Referrals have higher conversion rates than other forms of marketing since the referral comes from a place where the source trusts and knows properly. In this way, customer retention complements customer acquisition. Using customer retention strategies will promote customer loyalty. And this will pay off in spades.
If your customers are not happy or satisfied with your brand, they won’t refer to their friends. Instead, they will drive business away from you through negative word of mouth. This means that if you aren’t retaining your customers, you will eventually lose your potential customers. Failing to adopt a customer retention strategy will cost you a lot of time and money in the long run.
3 Customer Retention Strategies
Your customer retention strategy should optimize all three stages of the retention process. These stages include:
The onboarding stage begins once a customer purchases a product or service from you. And continues until the customer starts using the products and seeing their value. If your customer doesn’t see any value from your product in the first ninety days, it’s highly unlikely that they’ll buy from you again. The onboarding process is essential for customer retention.
Once a customer starts seeing the value of your product, the adoption stage of your relationship will start. During this stage, your customer will start seeing an increased value from their purchases by increasingly adopting the product features. If a customer starts seeing the value of your product from this stage, they are more likely to renew their relationship with you. Conversely, failure to see value can make them disinterested in your product.
The renewal stage will unfold when the customer decides whether or not to renew their relationship with you at the end of the period. The customer’s experience during the onboarding and adoption stage will influence their decision. However, there are certain things that you can do to encourage their renewal. How well you manage your activities will determine whether the customer closes a deal with you or renews business elsewhere.
Increasing customer retention
Now that you know the customer retention process and its benefits, it’s time to look at the strategies that you can use to boost your customer retention rates. Let’s get started!
1. Personalize experiences for memorability
Personalization is one of the critical keys to boosting customer retention rates. Remember, most people spend most of their time thinking about themselves. Therefore, delivering products and services in a personalized way will make your customers feel special. And they’ll reward you for this.
To personalize experiences, you need to know who your customers are and their intentions and interests. You’ll have a better chance of selling your products and services when you match your customers with their needs. Research studies have shown that 79 percent of consumers are interested in engaging with personalized offers.
2. Offer great services for positive experiences
A great customer service experience is essential to every customer. While you might not have considered it yet, customer service has a direct impact on revenue and retention. Studies show that 52 percent of consumers have made additional purchases from an organization after enjoying great customer services.
Customer service has the power to make your brand memorable to customers and visitors. When customers know that you are ready and willing to help them, they will respect, appreciate, and trust you more. One of the best ways to increase customer satisfaction is by using chatbots.
Chatbots improve customer experience and satisfaction due to their quick responses. You can include them on your website for customers to ask questions directly from the store. You can also use email and messenger to handle inquiries and ensure that the feelings of your customers are put first.
3. Ask for feedback and reviews
You’ve probably purchased something and received a follow-up message asking you about your purchase experience. Even if you don’t fill the form immediately, you’ll be happy to know that the business is interested in your thoughts and opinions. The best part is if the brand applies feedback to improve the customer experience.
One of the best ways to gather feedback is by adding a review option on the product page. You can also consider following up on customers who purchased your products recently via email and ask them to share their feedback.
Asking for feedback is one of the scariest things you’ll have to do since people can say nasty things. However, studies show that 77 percent of consumers love brands that seek out and apply feedback. Think of feedback as an opportunity to improve your business. Take the responses – whether positive or negative and do your best to improve your products and services. Customers will take note and appreciate your efforts. This will increase retention rates since you’ll show customers that you appreciate their thoughts and opinions.
4. Offer loyalty programs
A good loyalty program is a key foundation in increasing customer retention. Loyalty programs play an important role in guiding customers to become brand advocates. Loyalty programs are important in bringing customers to earn rewards for simple actions like following you on social media, making repeat business, engaging with social media posts, referring their friends, and writing product reviews to name a few. When you incentivize customers for performing these actions, you’ll give them a reason to return and purchase from you again.
5. Build an online community
An online community helps in bringing businesses and customers close to each other. An online community:
- Allows you and your customers to discuss your products and industry
- Provides a forum for users to ask questions
- Offer the ability for you to share contests and events to increase engagement levels
- Increases brand loyalty
- Reduces expenses by encouraging word of mouth advertising
You can easily set up an online community by using membership site software for your website. You can also create groups on LinkedIn and Facebook to facilitate discussions.
6. Know your churn rate
You need to calculate your churn rate. Churn rate refers to the number of customers leaving your site. Analyzing your churn enables you to prepare for changes that will affect your performance and consider strategies that will increase customer retention.
7. Use CRM software
Customer relationship software supports customer retention by allowing you to track customer behavior. You can get more information on product usage and purchase patterns. You can also track customer service interactions to figure out the problems that your customers are facing. Such variables act as warning signs that can be used to boost customer retention rates.
Customer retention is all about keeping your customers happy and fulfilled. When done correctly, customers will be unwilling to do business with your competitors. Every successful business recognizes that customers are the foundation of the business.