We have often heard that customer retention is more important for businesses as compared to new customer acquisition. Have you ever thought about why? The statistics below will provide the answers:
- According to Kissmetrics, the average global value of a lost customer is around $243.
- A study by Forrester Research revealed that acquiring new customers can cost five times more than satisfying and retaining current customers.
- Research by Bain and Company showed that returning customers spend an average of 33 percent more per order compared to other customers.
These numbers show why it is important for businesses to re-engage with their existing customers to get them coming back.
Harvard Business Review stated that 48 percent of customers who had a negative experience told ten or more people. It means that if your customers would be dissatisfied or unhappy, they won’t just stop using your products, but are most likely to spread negative word-of-mouth, thus affecting your sales.
Before we dive deep into the customer retention strategies, let’s start with the basics.
What is Customer Retention?
In literal words, customer retention means converting your one-time customers into returning buyers of your products or services. The primary goal of customer retention is to make your existing customers stay and turn them into loyal customers over time.
Powerful Ways to Improve Customer Retention
Your business can leverage multiple ways to retain customers. It is advisable to use a combination of different strategies to improve your customer retention ratio by several folds. We’ve put together some of the most powerful tips to help you ace the art of customer retention.
1. Unlock the Power of Customer-Focused Content
According to Altimeter, 57 percent of marketers identified that custom content was their top marketing priority for 2014. Due to the shift in marketing dynamics, from traditional means of marketing to digital, businesses have realized the significance of personalized content marketing.
In the present day, every marketer knows that content is king, but very few can reap the real benefits of content marketing.
It is because your customers don’t need more content. Your audience is already overwhelmed with content – ads, social media posts, emails, and never-ending information. However, they are interested in knowing how your products or services can resolve their pain points.
If you are not sure how to write custom content that converts, then here’s what you need to know:
- Start by identifying what information your customers need.
- Collect customer-related data through surveys, comments, reviews, and chat sessions.
- Understand when and where they would need content and select the channels accordingly.
2. Share Case Studies to Nurture Customers
We’ve often heard that case studies or customer success stories are the marketing staple, as they allow prospective customers to see how a product can be used. Other than this, case studies help build social proof because customers can hear about the experiences of others who’ve used your product.
Research by RSW/US Agency stated that 62.6 percent of respondents identified that client case studies are an effective source of lead generation. So, if you want to create a loyal customer base for your business, and stop your customers from switching to other brands, case studies are your go-to option to win the customer retention game.
For instance, MaRS Discovery Districts leverage case studies to establish credibility among its customers, and post them on social media as well, to attract new customers.
3. Value Customer Feedback and Incorporate it in Your Actions
In today’s highly competitive markets, there is a dire need for your business to gather information regarding your customers’ experience. This activity allows you to improve your products and marketing efforts to fit their needs with more accuracy.
Taking feedback from customers has long been regarded as the most effective way to measure customers’ satisfaction. From healthcare to restaurants and from e-commerce stores to mobile applications, using customer feedback to improve performance and delivery helps build the trust of customers.
For example, if you are running an online store, you can collect information regarding the shopping experiences of your target audience through surveys, customer contact forms, one-on-one interviews, social media, and customer calls. This feedback can be incorporated in your service delivery to stay on top of your customers’ priority list.
4. Establish a Relationship through Social Media
According to Online Reviews Survey, Google and Facebook are the leading platforms for online reviews. With the increase in social media usage, what can be a better way to retain customers other than engaging them on social media?
It is imperative to keep social media at the forefront of your customer retention strategy. Your customers should be able to access all your social media platforms easily. It allows you a good chance to interact with them meaningfully.
For example, I recently came across the website of a leather jacket online store. I saw that they have very strategically placed the buttons of their social media profiles on top of their website. It allows customers who visit the website to land directly on their social media platform to learn more about the brand and its products.
Here are several other tactics that can help build stronger relationships with customers by using social media:
- A study by Twitter showed that quick responses result in increased revenues.
- According to a report in 2017, 44 percent of consumers indicated that they are more likely to become repeat buyers after a personalized shopping experience with a particular brand. Thus, you can gain more out of your social media marketing efforts by adding a personal, human touch to your messages and posts.
- Rewarding your customers through contests, giveaways, and competition is an old but effective way of establishing long-term relationships with them.
5. Leverage Email Marketing
The Radicati Group revealed that more than 34 percent of people use emails; that’s around 2.5 billion people. Did you know each email that you send has the power to aid customer retention? It is because email marketing facilitates in reaching your customers, prospects, and leads on a personal level.
Here’s how to use emails in your overall customer retention plan:
- Send personalized emails to a specific segment of customers. For instance, when a customer takes action on your website or signs up for your event, reach out to welcome them.
- Leverage emails to send friendly reminders about new product releases, feature updates, and webinars that might be of interest to them.
- Emails allow quick feedback. Thus, you can use them to send customer feedback surveys as well.
6. Introduce a Customer Loyalty Program
According to research by Annex Cloud, 87 percent of customers stated that they want brands to have loyalty programs. So, an effective loyalty program can be a great way to retain existing customers.
For instance, in the airline industry, many companies offer loyalty benefits to frequent travelers. For example, Alaska Airlines offer top-notch benefits to its customers via its Mileage Plan program.
All in all, making customer retention strategies work is a time-consuming process because you cannot expect customers to turn into repeat buyers overnight. Establishing strong relationships with them requires patience and consistency.
Thus, the key takeaway is to implement a combination of the tactics mentioned above and track your progress against the set customer retention KPIs.