As an entrepreneur, you know first hand that customers are the biggest asset of any thriving company. This begins with generating leads, converting them into customers, and then retaining them as repeat customers. Customer retention marketing is a variety of activities aimed at keeping customers for the long-term and terming them into loyal customers. Acquiring new customers requires a lot of investment, time, and effort whereas it is cheaper to retain the existing customers.
Before you learn about retention strategies, you need to be able to calculate your customer retention rate (CRR) to understand the percentage of customers the company has retained over time. Over time, you want this number to keep increasing to derive more value from your audience.
How To Calculate Your Customer Retention Rate (CRR)
To calculate your CRR, you should subtract the number of new customers acquired from the number of customers remaining at the end of the period, and divide that number by the total number of customers at the start and multiply by 100.
CRR = [(Customers at end of the period – New customers during this period) / Total customers at the start of the period] x 100
Importance Of Customer Retention
Considering that loyal customers will always come back for your products and services, obviously, they’re your best business asset. Here are 5 reasons retention matters.
1. Increased Profits
Since existing customers trust your brand already, it is far easier to upsell or cross-sell them the other products and services offered by you. Data tells us that 80% of a company’s profit can be attributed to 20% of your customers. With increased sales to existing customers will directly impact your bottom-line and increase overall profits.
2. Brand Ambassadors And Influencers
Loyal customers can be harnessed to become brand ambassadors of your company. Customers that have positive experiences with a business tend to refer their friends and family and spread awareness through word of mouth, thereby driving new customers to your company.
3. Lower Costs
Acquiring customers can be anywhere between 5 – 25 times more expensive than nurturing an existing customer. By focusing on retention marketing, a business can reduce overall costs in sales and marketing without affecting the revenues thereby increasing margins.
4. Increased Feedback
You can survey customers on a regular basis and repeat customers can give you insights and detailed feedback regarding customer service and their expectations regarding the product. This is a great opportunity to incorporate feedback and improve your customer satisfaction rates and also learn about the growing needs and wants of your customers.
5. Higher LTV
Existing customers have already bought from you, so unless they had a disappointing experience, they will buy from you again. You’ve already established trust in your product, leading to a higher lifetime value of the customer.
Top 7 Customer Retention Strategies For Women In Business
Here are some customer retention techniques you can implement to keep your customers and increase revenues.
1. Personalized Follow-ups
A brand’s success depends on the ability to offer a unique, personalized journey for the customer. You can also personalize your communications, by creating custom content that engages your customer in each stage down the funnel. Using automation tools, analytics, and getting customers to create an account can help understand the customer better and map their journey for better product recommendations and personalized customer service.
2. Offer Special Rewards
Every customer retention plan should include a method to reward the most loyal customers. This can be done by providing special discounts, premium features, early access to content or products, etc. This would inspire more active participation, and in turn, build your customer’s confidence to trust in your brand. You can also institute a referral program to appreciate when an existing customer recommends your service.
3. Provide Exceptional Customer Service
Once you have achieved meeting customer expectations, go the extra mile by providing above-and-beyond customer service. This can be done by providing support on the right channels based on what is most suitable for your audience and business – whether live-chat, phone support or even on social media. To provide a speedy and consistent service, it is important everyone in the company is in the loop and the right person is assigned to help customers.
4. Automate Marketing Communications
One can use automation for constant marketing communications with customers via their preferred channel as a key to retention marketing. Monitoring and keeping up with your customers manually is time-consuming. But automation can help boost conversion and give you the opportunity to deliver on the promises that you made to customers. Through marketing automation, you can manage your customer contacts, drip-feed educational emails, schedule promotional emails, text messages, and even event notifications.
5. Delight Your Customers
With customer expectations at an all-time high, the only way a business can stay competitive by creating the best shopping experience and overdelivering on your promises. You can create delight for your customers by incorporating fun designs, thank you emails, or any other small thoughtful gestures. This can also be done by promising to deliver a product with one-day shipping or hosting special events for loyal customers as one of the customer retention strategies for long-term growth. It’s no wonder then that consistently good service is one of the biggest drivers of repurchases and recommendations.
6. Customer Reviews And Testimonials
Another great technique is to solve customer complaints and turn them into loyal customers. People these days do not make any purchases before reading reviews online. Leverage customer testimonials to convince new customers to choose your product. Similarly, address customer complaints and negative reviews to reduce their impact on the audience and help develop a good brand reputation.
7. Educate Your Customers
Sending emails is still the number one customer retention strategy that works. Email marketing has over the years been a major way of increasing customer conversion. If they can get valuable content from your company in the earlier stages, they probably will like to remain with you. This can help you nurture your customers through the sales funnel and upsell them other products. Using customer’s personal experience at some point in the pre-sales, sales and even post-sales stages can be very effective. Other educational options include live webinars, ebooks, and whitepapers too.
- Determine your customer retention strategy in line with the brand proposition and integrate it with the overall marketing plan
- Based on your customer retention strategies, you might need to hire the right personnel or reassign people to handle the day to day management
- If your business has a sales team, paying commissions on customer renewals may increase retention
- After executing the plan, measure results for an increase in purchases and customer loyalty and adjust or change strategies based on actual performance and ROI
- Use Customer Relationship Management (CRM) software tools to help manage, automate, and execute retention marketing strategies for a wide audience easily
From small startups to global Fortune 500 companies, these customer retention strategies can be implemented to deliver great results. If you provide an amazing product or service, adding these strategies to your marketing mix will set you apart from your competitors and create a lasting impression in the minds of your customers.