What Is Customer Retention?

If your company is like most others, you work extremely hard to market to your target audience and attract new customers. However, you should work with equal intensity at customer retention. It doesn’t do you much good to constantly attract new clients if you lose the ones you already have.

Brands spend 11 times more attracting new customers than keeping current ones. When you look at the cold hard numbers of what an active client is worth compared to a new one, the importance of customer retention as part of your marketing strategy becomes clear. There are some easy ways to keep people happy and buyers loyal to your brand.

1. Remember Your Loyal Customers

Even when you market to your target audience at large, you should always keep customer retention in mind and make sure any offers to new clients don’t beat out what you currently offer old ones. Think about how aggravating it is to pay your satellite television or cellphone bill and see an ad for a deal that’s about half what you pay. You call your provider for more information and are told it is only for new customers. So much for your five years of loyal subscribership.

Instead, remember your loyal customers and make sure they get a better deal than anyone else. They are the ones who bring money into your business month after month and year after year. You have no idea if a new client will stick around.

2. Serve Dynamic Ads

Dynamic ads have burst onto the scene in recent years as online advertising gets more personalized. In a nutshell, dynamic ads consider what the customer already looked at or bought and decide on what they’d be most interested in based on past behavior. You can keep current customers by consistently offering them products and services that are similar or complementary to ones they already use.

If you sell clothing, perhaps you get a new pair of boots in stock that goes perfectly with a western dress in your inventory. You would send out an email to anyone who purchased that dress and tell them about the new product. You could even offer a discount since they already bought the dress.

3. Become a Trusted Adviser

What is it about a good hairdresser that keeps people coming back time and time again — even if their prices are higher than other stylists in the area? Usually, that person is trusted to make good recommendations, and they understand how individuals’ hair works. They also listen to the client’s concerns on personal issues. They become more than just an expert, but also a trusted adviser. Strive to become this for your customers, and share your expertise with content.

4. Reward Their Loyalty

The 2019 Loyalty Barometer Report shows that 61% of consumers feel the best interaction they receive from companies is a surprise gift rewarding them for their loyalty. Think about how you can best reward your long-time customers and keep them engaged with your business. If you sell organic, fresh baby food, perhaps offering a new flavor for free to current customers would entice them into staying with you. Your gift doesn’t have to be expensive, but it should be relevant to your business model. A small present could easily improve your customer retention rates.

5. Get to Know Them

Spend time getting to know your customers and understanding their needs. Once you do this, you’ll be better able to serve them. In a survey of more than 12,500 respondents, PEGA found around 63% of people felt companies should spend more time learning about them. Send out surveys, study your internal data, and create programs and communications that speak to your current client base. The best way to improve customer retention is through understanding your buyers and what their pain points are. You can’t solve their problems if you don’t know about them.

6. Speed up Delivery Time

Customer retention is a challenge for small businesses. Especially in an era where Amazon delivers things in two days or less and Walmart is right on their heels. The public is used to getting their e-commerce items quickly. However, smaller companies don’t have the same logistics opportunities as mega-retailers. In a survey by the International Council of Shopping Centers, researchers found one of the most important factors in online customer service dealt with the speed of delivery. About 55% of respondents said this was one of the most critical factors in where they choose to shop.

For your part, contact shipping companies and figure out how you can speed up the time from the moment the order is placed to when the shipment goes out their door. Can you get bulk discounts? Is one carrier better than another? Perhaps for local orders, you can hire delivery drivers and get the item there at lightning speed? Think about any small thing you can do to compete with the big guys.

7. Develop a Single Focus

In today’s marketing, it’s popular for brands to embrace a cause in an effort to relate to their audience. However, if you aren’t fully committed to it, you may see lackluster results from any marketing efforts put behind it. In a study from DoSomething.org, researchers looked at 88 different brands with social cause platforms and found many simply weren’t resonating with Gen Z. There was only an average awareness of 24% of the brand and its cause. You must care, or you’ll come across an inauthentic.

Instead of spreading yourself across a variety of causes, find something that ties into your product and embrace it for better customer retention. A good example of a brand accomplishing this is Dove with its body positivity campaigns. It has used the same theme for several years, and people have come to associate Dove with improving women’s images of their own bodies.

Customer Retention Metrics

One of the best ways to keep the customers you have is to focus on the metrics and track campaigns carefully. Customer retention starts by surveying people and solving any problems they describe. If a current client is worth more than a new one, do everything in your power to fix issues and keep that buyer happy. You may just gain a lifelong fan who will talk your brand up to others.