Research shows that even a small rise of just 5% in customer retention can result in profitability increases anywhere from 25% to 95%. The same study revealed that the acquisition of new customers is between five and twenty-five times more costly in terms of ROI than the cost of investment when it comes to retaining a consumer. Repeat buyers are more likely to spend more on your products or services than new customers as well, with returning consumer sales reaching up to an average value of 18% more than brand new ones.
In short, if you keep your customers onboard, you can cut business expenses while driving up revenue. However, keeping customers isn’t easy. While figures vary depending on the industry, the average business loses 15% of its clients every year. Stemming the flow of such a customer exodus is critical, but how can your brand achieve a better customer retention strategy?
Keep Them Aware of Your Brand and Opportunities
The average adult forgets three things a day. Don’t let your business be one of them. Engaged consumers are five times more likely to continue to spend money on your company over competitors. But for customers to be engaged, you need to engage with them first. Don’t expect them to do the work for you.
Keeping customers aware of your brand is an essential part of your customer retention strategy. An example of success in this area is in the medical industry. In recent years, healthcare businesses have begun to employ appointment reminder software as part of strategies to tackle no-show rates. Studies have discovered that this tactic has improved attendance by up to 36%. Keeping people aware has driven engagement up. For those in other industries, tactics like email marketing have been shown to reap similar rewards.
Other areas of engagement that can increase consumer retention are social media campaigns, loyalty programs, and advertising strategies that target previous consumers.
Make Service Key to Your Customer Retention Strategy
There is no grey area when it comes to the value of excellent client service in terms of a customer retention strategy. The facts and figures speak for themselves, and the quantity of evidence out there is seemingly endless.
Lousy customer service cost US businesses a combined total of $75 billion in 2017. How did this happen? It isn’t surprising when you consider the fact that 82% of people will stop using a company after one single bad customer experience. This money isn’t leaving the market — it is going to other businesses offering better care for their clients.
The shift to new businesses that provide better customer service is all about a trending interest in client care. Expectations of great customer service are rising year-on-year. Your consumers are expecting you to go further and do more to look after them — and this is particularly true of younger generations. Overall, 90% of people judge good customer service to be utterly essential when it comes to interacting and purchasing from a brand. If you don’t provide that service, they’ll go elsewhere.
Client care must be at the heart of your customer retention strategy. The damage of poor customer service is black and white. If you don’t look after your buyers, they will not hang around for long. Invest in making your customer service as strong as possible, and you’ll see higher rates of customer retention. Methods include:
- Ensuring fast response times
- Friendly and accommodating service
- Flexibility when dealing with customer requests
- Easy contact and communication
- A personalized touch when dealing with clients
- Going the extra mile and offering additional support, even if it is not directly profitable
- Listening to complaints and criticism and reacting in a positive way
Provide Them with the Services They Expect from Your Industry
Bad experiences with a brand result in angry customers — customers who are much more likely to stop using your services or buy from you. But a bad experience isn’t necessarily about customer service. It can also be about a failure to meet expectations.
Consumers come to expect different things from different industries and business types. In the example of appointment reminders as referenced above, many of those in the healthcare industry now use this kind of service to ensure patients are aware of their appointments. Those don’t risk upsetting clients, as they’ve come to expect brands to support them in making it to important dates and treatment sessions.
Avoiding bad experiences can be a core part of your customer retention strategy — which means knowing precisely what your customer wants to see your business provide. On eCommerce websites, customers may want free shipping or a good return policy, while consultations, review sessions, or detailed reporting could attract customers to marketing services. For those in healthcare, the draw could be the appointment reminder services mentioned previously.
What your customers will need to experience a satisfactory service that drives them back to your brand will vary from industry to industry. So a successful customer retention strategy must be supported by a comprehensive knowledge of your sector. Competitor research is a powerful tool that can help you discover what expectations specifically apply to your business.