The everyday business acquires new customers while it is more important to keep your existing customers happy. Therefore, your business needs to put some effort into retaining the existing clients. Having the current customer base is more important than acquiring a new customer. Acquiring new customers for the business costs 25 times more than retaining an existing one. Meanwhile, the repeated customer spends 67% more than the new customer. So businesses need to focus on their customer retention strategies.
Build your customer retention strategies to improve customer engagement and keep your customer happy. If you wonder how you can improve customer retention online, then this article will help you out. These are proven tips and strategies that you can apply to boost your business and keep customers coming back for more. Let’s begin!
What Is Customer Retention?
Customer retention is measured as a percentage of the customers who return to buy a specific product/service or a proportion of the customers who remain active in the business at a particular time.
Customer retention is a growth in your business. Many companies now find their existing customers are one of the best sources for driving new customers. It is the key to long-term business success.
Once your company makes customer lifetime loyalty with your brand, then you have hit the jackpot. On the other hand, winning new customers and losing numerous existing clients will make the company quite expensive. Make customer retention a significant part of the business strategy. It is the most cost-efficient means of doing business.
Why Is Customer Retention Important for Business?
There are several other reasons for business why customer retention plays an important role. For example, more than 50% of returning customers are more likely to make a purchase, and they spend more than 33% than the new customer of your business. Therefore, customer retention has to be the priority of the business.
Increasing your returning customer is the most profitable way to run a business in the long term. It also helps reduce your marketing costs. Many customers start to refer to their friends and family about products or services if they are happy. WOM marketing (Word of mouth) from your current customers is five times more powerful than advertisements.
This will increase the trust in the brand among the people and will eventually drive more traffic to your business, decrease your marketing cost, and save money. In addition, word-of-mouth advertisement will grow organic traffic and revenue.
Here are the top benefits of customer retention
- Customer retention is more economical than new customer acquisition.
- Loyal customers make your business more profitable. According to the research, customers interested in your brand will buy 90% more frequently.
- According to a Harvard study, retention will increase the business profit by 25-95%.
- Word of mouth advertisement from a loyal customer will build a brand and increase the brand awareness among the targeted audience.
- Allows you to develop valuable relationships with your customers and brand.
- From the customer feedback, you can identify and fix the error early, and listening to your customer’s voice will improve your brand.
- The loyal customers of your business are more willing to try your new products.
- It helps your brand to stand out from the crowd.
- Customer retention helps to improve customer engagements with the help of customer feedback.
How to Measure Your Customer Retention Rate (CRR)?
CRR (Customer retention rate) indicates the percentage of customer retention over a specific time. Here is the method to calculate your business CRR. Customer churn is the flip side of customer retention. It represents the percentage of customers the business lost over a specific period.
8 Easy Ways To Increase Customer Retention And Minimize Churn
Emails are a great way to follow up with your potential customer without annoying them. The email sequence is the most convenient and logical way to follow up with your prospects after the first intro or demo etc.,
Your business can transform the visitors of your site into customers with email marketing. Email sequences are powerful to retain the customer. The Email sequences are the best method to trigger the customer in different buyer stages. For instance, if your customer is not active, then an email newsletter about the limited-time offers may induce them to visit the website and purchase. Your business can plan the Email sequences based on the customer purchase behavior, browsing behavior, abandoned cart, subscriber list offers, and more. In this section let’s dive deeper into the ways that we can improve customer retention.
1) Customer Onboarding
The customer onboarding process differs based on the business niche, but the ultimate goal of the onboarding emails to the prospect is to educate your customer about your product.
The onboarding process should be overwhelming, and it should not speak much about your business and sales pitches, then your prospect may ignore them. Once your customer purchases a product, your onboarding email has to be short with the step-by-step tutorials videos, unlimited guidelines, knowledge base, etc., along with the information to reach the customer service team if they face any difficulty.
Personalized onboarding welcome emails are an excellent way to begin your conversation with your new client. So take this opportunity to educate clients to utilize your products in the right way to maximize their results. The welcome email timing is more important, and the onboarding emails have to be sent within 30 seconds of the customer’s signup with your product. The above email is the best example of the customer onboarding email from Frase.io.
2) Design Customer Loyalty Programs
According to the study, the business (B2B) that successfully engages their clients has a 63% lower customer attrition rate, 50% increase in productivity, and 55% increase in the share of wallet (SOW).
Your business has to invest in creating customer loyalty programs. First, you need to reward your customer who frequently purchases from you. Second, the reward program has to inspire your consumer to buy your brand for the long term.
It shows how your business pays attention to loyal customers. With the help of CRM tools, you can quickly identify the top consumer for your business and prioritize the buyers. Then, create some exclusive loyalty programs for this group of customers. Your business will reap many benefits by rewarding your top loyal customers.
Another best way to get your customer to invest in your brand is by implementing gamify loyalty program. These gamify loyalty programs are commonly seen in airline brands. For example, By adding the miles travelled in the flyers account, the customer gets rewards points, badges, and other benefits based on the various levels they reach. These loyalty programs will motivate the consumer to use your brand more frequently, and this helps your business to improve the customer retention rate.
Your business can also offer to reward the loyal customer with grandfather pricing, sending special offers and discounts, surprise offers for the 20th order, etc. You can also share referral offer programs that encourage your customers to refer their friends, earn rewards on customer feedback surveys, etc. are great ways to engage your customer through loyalty programs.
3) Set Expectations Early For New Products
If your business launches a new product, you can create interest among the existing customer base with the new product announcements. This makes the existing customer know about your upcoming product feature before the release to the market. This approach also increases your pre-sales booking and also helps the development.
The emails on the new product launch will build a buzz. In addition, your business subscribers will purchase once the product is launched. Apple brand’s pre-launch campaign/pre-launch announcements are a great example that cultivates expectation among their current apple users. Here is an example of the International Collection band’s announcement by Apple in their newsroom.
4) Customer Feedbacks
Customer feedback is the key to retaining your customer base. The customer feedback provides you insights into how your users feel about your products. As a result, you can understand the user’s likes and dislikes and improve your products.
Today there are numerous customer survey templates & methods available. The most popular way of customer feedback is the Net Promoter Score (NPS Methodology). It doesn’t consume much time of users, so there would be more chances for getting a response for your customer feedback survey. It is the simplest method to get feedback, and the survey comprises a simple question and a rating scale from 0-10. Closing the customer feedback loop is more important. Your business can make use of the tools like Hubspot Customer Feedback Software.
5) Announce New Features Updates
Actively offer support to your product users and encourage them to make the most out of it from your product. Your business can retain your customer through periodic updates on your products through emails. It would be best if your business shared the new feature before they request the feature updates. This makes the customer more satisfied as they get what they expect from your product. It is the most effective method to satisfy the consumers and enhance the user experiences.
6) Put Your Products Top of Customer’s Mind
Your business can’t stop the marketing process as someone has become your customer. Your current customer is the recurring user of your product, so you need to stay top of mind to win the market competition. There are various methods and techniques to improve customer retention. The most effective way: the weekly newsletters with personalized communication, social media contests, and sharing valuable content like videos, blog articles, Definitive guides, Podcasts sources to the customer make the customer remember your brand.
7) Create Online Community
Building an online community is a great technique to engage your clients and improve user retention. There are two kinds of online communities.
I) Public social networks communities
Creating online communities on social media like Facebook, Instagram, Tiktok, Twitter, etc.
II) Brand communities
This community is different from the previous one. Your business needs to add the email and password to access the customer who wants inside the community. It’s like a private member club etc.
Businesses can gain many advantages by having an online community, such as
- Helps In Diving New Product Innovation Ideas
- Getting To Know The Customers
- Minimizing Customer Support Costs
- Increasing Engagement
- Can Obtaining Feedback
- Word Of Mouth Will Improve Your Brand Loyalty
- Enhance Intense Discussion
- Promotes User-Generated Content
8) WOW Factor In Business
Business is all about differentiation. Customers are constantly seeking new experiences and new things to buy. So to stand out in the market, you need to stand out the way you do business.
The best businesses are filled with employees who have a “wow factor” that goes above and beyond in delivering intangible things other than customer expectations, such as offering excellent customer service or a piece of in-depth product knowledge content. Unique Wow, factors are more important to any business. If you create wow elements among your loyal customers, it will become a brand advocate and help to refer new customers to your brand. Delighting your customers will fuel your business growth.
Author Bio: I’m Vaibhav Namburi and the Founder of SmartWriter. I’ve helped build multiple multi-million dollar companies and I love approaching Start-Ups through product-led growth.