Getting less than great results from your investment in marketing could be the key driver…
How Can Your Company Increase Customer Retention?
While businesses are always looking to attract new customers in order to expand and grow, keeping your existing customers happy and coming back is critical to your company’s overall success. That first purchase is just the beginning of what you want to be a long relationship. So what’s the secret to achieving higher customer retention?
In the big picture, we would say the overall customer experience (CX) is what helps you achieve a high level of brand loyalty. Whatever you or your employees do, you need to stay true to your brand and deliver on your brand promise. Be consistent, day in, day out, in person, online or over the phone. Treat your customers like you would want to be treated, but even better. Make the whole customer experience easy, enjoyable and predictable.
Leverage the Power of Your Employees
Employees who are passionate about your brand can deliver a personalized customer experience that translates into brand loyalty. By clearly defining your company’s mission and brand promise, and offering CX Design and implementation to show your employees their role in customer retention, you are giving your employees reason to care, and engaging them in the process.
Engaged employees are inspired by your brand and where it’s headed, and can’t wait to share their passion with customers through a personalized customer experience. And passionate employees are passionate beyond the normal working hours, and become brand ambassadors wherever they go.
Be sure to provide your employees with regular feedback – and not just about what they’re doing wrong. Highlight and reward successes. People repeat behaviors that they have been praised for. Also, check in with your employees on a regular basis to make sure they have the resources they need to do the best job. This can include specialized training, equipment, or removing barriers to innovation.
Customer Retention Strategies
Some of these customer retention strategies are directly related to providing an excellent customer experience, while others relate to forging an ongoing relationship with your customers.
- Listen to your customers. Really listen to what they want and need.
- Involve your customers in the design and delivery of your service.
- Ask for their ideas and suggestions.
- Set up reasonable expectations early. You’ve heard the phrase under promise and over deliver? It makes for happy customers.
- Be responsive. Ideally, a live person answers the phone at your company. If not, make sure someone returns a phone call within 90 minutes. A customer who emails should get a response within 24 hours. Sooner is better.
- Be transparent and honest. If you ran into a problem, tell them what it is, why it happened, and what you’re going to do about it. Don’t be misleading in your advertising.
- Make it easy to pay. Consider accepting payment through Zelle, Venmo, PayPal, Apple Pay, etc. rather than just check or credit card.
- Ask for feedback on ways to improve their customer experience. This can be through an online Customer Satisfaction Survey, filling out a Customer Experience Scorecard, or writing a review. Make it easy by sending a follow-up email with a link to the survey or your business Facebook page.
- Resolve any issues quickly. When a client is angry or frustrated, it’s a perfect time to show your dedication to your brand promise by working closely with them to make things good. Go above and beyond to deliver the outcome the expected.
- Follow up on negative feedback or sub-optimal outcomes by changing the way you do things, to ensure it doesn’t happen again.
- Thank your customers. You’d be surprised the impact a handwritten thank you note can make.
- For new products or services, create opportunities for beta testing with existing customers.
- Keep in touch. Reach out with special offers. This can be via an email newsletter, text messaging, or direct mail. But don’t be a pest. Find that happy medium of customer communication.
- Reward loyalty. Offer a free service or special discount to repeat clients, or start a referral reward program.
- Invite loyal customers to company functions—picnics, meetings, social outings, etc.
Calculate Your Customer Retention Rate or Churn Rate
There may not be an official formula for keeping track of customer retention, but this one from Inc. magazine works. Keeping track of customer retention is looking on the birth side – how many customers you kept happy. You can also look at your so-called “churn rate” – the number of customers who leave you in a given period. To calculate the churn rate, you take the total number of customers who left your company during that period divided by total customers at the beginning of the period.
Customer Retention Statistics
If you’re not already persuaded that customer retention can result in higher profits and less money spent on marketing, take a look at some of these statistics:
- Landing a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one, depending on your industry. (Harvard Business Review)
- Increasing customer retention rates by just 5% increases profits by 25-95% (Bain & Company)
If you’re ready to focus on customer retention and brand loyalty, it’s time to focus on creating the best customer experience possible, and then following through with customers to forge an ongoing relationship.