If your business gains and loses customers at an equal pace, you’ll never see the growth you desire. To thrive as a company, you must keep loyal fans while reaching new ones. Focus on customer happiness, and you’ll create a strategy that helps you please both current clients and reach new leads effectively.
In one study, researchers found increasing customer retention by a mere 5% increased profits between 25% and 95%. Keeping your loyal customers happy impacts your bottom line.
What Are the Major Benefits of Customer Retention?
Although revamping your customer service policies to focus more on current customers may be a bit of extra work, there are clear pros to keeping the customers you have:
- Save money. It costs money to seek out new leads.
- More targeted campaigns. The better you know your clients, the more you can segment them and personalize marketing messages.
- Gain word-of-mouth promotion from happy patrons.
- You can only grow by adding to your base.
Additionally, and perhaps most importantly, it provides an increased return on investment (ROI). The 80/20 rule shows that 80% of your profits come from 20% of your customers. Focusing on the few may result in higher revenue.
Now that you know how important customer retention is, you probably realize there are some steps you can take to improve yours. Here are five easy steps to help you improve your strategy today.
1. Audit Your Processes
Spend time looking at your customer service policies. Which ones seem to aggravate your current customers? How can you change them to up the satisfaction level?
Look back at customers who haven’t ordered in a while. Why did they leave? You may want to reach out to them and have a frank conversation about what you can improve. Although many won’t return, you’ll learn what not to do in the future.
Look at each touchpoint in the customer journey. How do you onboard new customers so they feel comfortable with your brand? Do you reach out frequently? Use software to inform them when it’s time to reorder, or about new products they might be interested in.
Have employees sample the ordering process and look for holes in your customer service strategy. The more feedback you get, the more you’ll see where you have issues.
2. Build Relationships
Take the time to build relationships with your customers. Big clients should have a committed sales team to reach out frequently and assess their ongoing needs. If you serve business clients, their needs may also change as they grow and morph into a more established company.
Take the time to phone even your smallest accounts. Talk to them about how well you’re meeting their needs. Seek out solutions to any problems.
People are much more likely to be loyal to a brand making an effort to provide custom solutions. Even if they have a major complaint, they should know they can contact a real human and get a response and resolution quickly.
3. Get Emotional
Tap into your customers’ emotions. The world is very impersonal these days, and people want to connect on a deeper level. Whether you embrace causes your customers care about or simply address their pain points, know what makes them tick.
In a survey of 3,800 consumers of all ages, researchers found consumer loyalty is higher than ever. Around 26.4% reported having more loyalty to their favorite brands, while 60.2% stayed the same.
The most successful brands tend to understand their clients’ fears and concerns. They offered solutions during a global pandemic, such as adding curbside pickup, delivery, and online order options. Try to see things from your customers’ perspective and offer solutions that make their lives easier.
You could also tap into causes they care about as makes sense for your company. For example, if your typical buyer wants to reduce their carbon footprint, you can do the same by reducing energy usage and increasing recycling efforts.
4. Segment Your Customers
Perhaps you have fans from different demographics. You may serve both millennials and baby boomers. You might sell products for stay-at-home moms and working parents. Think about what makes each portion of your audience unique from a messaging standpoint. Separate them into groups.
Personalized messages resonate with customers more than generic ones. What makes sense for that segment? One might prefer clearance items, while another might want the newest arrivals. Cater your message to their preferences.
Customers want to feel like more than just another number. They want to know you care about their needs and truly get them. Customization is the best way to show that, but without segmentation, it becomes an impossible task.
5. Reach Out
Take the time to reach out to your customers. As mentioned earlier, you can connect on an emotional level when you understand their pain points better.
However, you can also enlist their help in growing your brand and make them more likely to stick around. Ask if they’ll share your business with family and friends. Start a loyalty program and reward them for referrals.
Once they recommend your company to people they know, they’re more likely to remain your customer. After all, they’ve told others how great you are. They may even be more likely to overlook minor issues.
However, keep your customer service pledge in place. You want their expectations and happiness to remain high so they keep referring new people while staying with you.
Customer Retention is Your End Goal
Think about the brands you’ve used forever. Why do you stick with them? The key is usually consistent quality, customer service, and value. Offer the same types of things to your clients and you’ll develop a loyal following and growth over time.
About The Author
Eleanor Hecks is the Editor-in-Chief of Designerly Magazine, an online publication dedicated to providing in-depth content from the design and marketing industries. When she's not designing or writing code, you can find her re-reading the Harry Potter series, burning calories at a local Zumba class, or hanging out with her dog, Bear.