Customer retention 101
Pleasing your customers is a demanding process that often requires intricate marketing strategies and various tools along with plenty of invested effort to get your buyers to come back. As the e-commerce industry expands, both small and large businesses search for effective ways to achieve customer-centric tactics; this approach has as much to do with gaining new customers as it does with keeping them. Customer retention strategy is a way to increase sales and revenue, but also to show some leverage in today’s competitive digital marketing world.
With some broader knowledge about what client retention actually is and a couple of handy tips you can implement in your marketing activities, you’ll be able to improve your results in no time at all.
What is customer retention?
In order to fully implement a customer retention strategy, you need to understand what this marketing term actually signifies. In the most common words, it is a cluster of activities that business owners use to persuade their customers to come back after the initial purchase. You make an effort to engage existing customers to keep your products or using the services of your company. These clients are the ones you have already converted.
Customer retention activities increase the profit your business gains from an individual buyer. This is why every company can find multiple benefits from improving their customers’ experience. Customer retention will create a solid customer base and maximize the revenue you receive for each buyer this base is made up of.
The significance of keeping your customers
Let us start with the most obvious and, for many companies out there, the most important reason customer retention matters. It is five times more expensive to attract a new client than it does to maintain a relationship with an existing customer. It all comes down to a simple fact: low retention will indeed have a negative impact on your ROI. Keep in mind that this information matters equally to new businesses as well as to the already developed companies.
Additionally, customer retention activities will greatly improve the reputation of your company. If your clients feel that their needs have been served and their loyalty is being rewarded, they will be more likely to provide referrals and spread a positive image of your brand.
The benefits of an effective customer retention strategy
Higher conversation rates
Keeping your existing customers and making them come back to make another purchase means the buyers-visitors ratio of your website improves. If your clients are happy with the sort of service or product you offer and they appreciate the support you provide, they will make purchases repeatedly. This, in turn, will help you gain a deeper understanding of their behavior. Thus, eventually, you will be more likely to offer exactly what your potential clients need – and increase the likelihood of converting.
Working on retaining your clients enables you to continuously improve your business. Once you determine what makes visitors engage with your service or product, you will be able to work on the satisfaction levels. Eventually, gaining a better understanding of your buyers’ needs is a way to make changes that will truly have a positive impact on your brand’s image.
As the abovementioned data implies, customer retention is far cheaper than acquiring new customers. No need to explain why an effective retention strategy will increase your profits and lower your expenses.
High ROI is the ultimate goal of every marketing campaign. Retaining clients improve the odds of converting and gets a higher ROI. Email marketing is among the activities which bring the highest ROI; using this option to retain existing customers is approximately 16 times more cost-effective than building a relationship with a new customer using this method.
Customer retention techniques you can implement
There are several activities that can help keep your customers coming back.
- Providing content that answers buyers’ questions and helps them gain a better understanding of your product or services. Content creation will also help increase the traffic of your website by improving your SEO efforts and at the same time engage your customers; thus compelling them to revisit your website and make another purchase.
- Building a customer community through comment sections, discussing ideas, and offering suggestions is another way to convince clients to come back for more.
- Asking for customer feedback. Listen to what your buyers have to say about the qualities and potential flaws of your company and what it has to offer. Make proper adjustments accordingly and improve clients’ satisfaction.
- Improving customer experience and user experience can be a long-lasting and demanding task, however – an effective one in terms of customer retention.
- Developing loyalty programs – reward systems for your customers. Loyalty programs allow your buyers to receive discounts or convert points into cash value. Some brands charge customers to participate in loyalty programs.
Types of Customer Loyalty Programs
When it comes to loyalty programs, there is more than one way to implement this customer retention technique.
VIP program – it consists of multiple levels based on the amount of money the buyer spends or some other parameter you determine as relevant. The more a customer engages, the higher level of VIP program they fall into.
Referral program – running a referral program brings new customers and engages the existing ones at the same time. This makes it a highly efficient customer retention strategy. Incentivize your clients to gain rewards by bringing new buyers. A word-of-mouth strategy is one of the oldest marketing techniques in the book.
Points Program – this is one of the most widespread reward programs. Buyers are being rewarded for engaging on social media or subscribing to your company’s newsletter; or even leaving a review of your product or services. By taking the time to do this, customers gain points that they are able to redeem once they reach a certain number.
The best asset your brand has is your customer base. They know your business and your products. By focusing your efforts on providing them with a better experience, you will convince them to appreciate your brand even more. Try implementing some of the customer retention strategies and see how these efforts can improve your revenue in the future.