One of the main reasons that make the business grow is customer retention. Your main priority as a business owner is to find new ways to increase revenue, which means you need more customers to sell more. Many organizations often fail to attain business goals as they focus only on gaining new customers, not on addressing the needs to retain the existing ones. More than 44% of companies believe that acquiring a new customer is almost five times as expensive as retaining an existing one. Your business must engage in new & effective strategies to help in retaining the customers you already have. Customer loyalty solutions are all about rewarding your customers with a smooth experience for all digital touchpoints to strengthen relationships & drive more revenue.
Why is Customer Retention Essential for Your Business Growth?
Every business indeed needs new customers but keeping focus on existing customers is also important as they are the ones who are the predictable source of new revenue and who know your services and have already brought from you. Customer retention is all about how successful your organization is in acquiring new customers and satisfying old ones. Research states that only a 5% increase in customer retention can boost your business revenue by up to 25-95%.
Here are some of the main reasons that show how customer retention plays a main role in promoting a company’s growth-
Your old customers are the ones who are most likely to buy from you again unless they had a bad experience. As they have associated with your brand for a long time with trust and confidence in your services, it can easier for you to predict their moves and offer customized experiences.
Lower marketing Costs
Finding new customers requires lots of effort and marketing costs as you need to make them convinced that you are the brand they should associate with. On the other hand, maintaining a relationship with your existing customer will cost 16 times lesser than creating a new one.
When you know your customers, it becomes easy to analyze their feedback and improve your offerings, which will eventually lead to higher satisfaction rates. Listen to your customers to figure out if your customer service is good enough or is there any product of yours that they want you to improve.
Trust plays a main role in winning your customers’ hearts and existing customers are the ones who trust you already, which is why convincing them to continue using your services is easy. A study by Gartner says only 20% of your existing customers are responsible for 80% of the company’s future revenue.
Strategies to Help Your Business Manage Customer Retention
Customer retention management is a way of delighting customers to make them choose you over your competitors again and again encouraging them to stay loyal for a long time. Here are some of the top strategies that can help you manage customer retention in your organization-
- Focus on Case Studies
If your existing customers are happy about your services, make sure that you highlight success stories and share the results you achieved. Also, share testimonials from your existing customers to let them know how much you partner with them.
- Meet Expectations Early
As they say, customers are king, it is important to know that your customers are coming from different industries and their take on your products’ prices may vary. Understand their points of view and keep your communication clear from the beginning to make sure that you meet the expectations.
- Communicate Regularly
To build a strong relationship with your customers, you must stay in touch with them by being transparent about the activities since they are associated. You can also make use of a project management tool to keep track of how far your customer has moved along with your team.
- Make Good Memories Count
We know negative experiences are what people tend to remember, even if there are many other positive ones. Successful companies are the ones whose customer success team focuses on creating memorable experiences around positives and successes. Even if anything negative occurs, your team should communicate, apologize, and fix the issues as early as possible.
- Listen & Act
Your customer retention rate will never improve if you are unable to first understand why customers leave. Try to find out the reasons by taking feedbacks seriously and act accordingly to improve the services. Never forget to ask for regular feedback as that is where your services can improve.
- Keep Record of Communication & Past Issues
Anything related to your business such as the company’s culture, leadership, or common practices can contribute to customer retention. Maintaining CRM is one of the most effective ways to store notes or information from meetings/calls, preferences, earlier purchases, etc.
Hopefully, you must have got an idea of how important is customer retention and how it will help you boost your company’s growth. Make sure that you follow these tips to manage your customer retention effectively. Loyalty programs are everywhere but building a strong one that focuses not just on customer acquisition but also customer retention is necessary. Every industry vertical is making use of loyalty solutions. Whether you are looking for loyalty programs for banks, healthcare, eCommerce, or any other sector, you must start by making your existing customers happy. Get in touch with the expert developers to build a customized loyalty solution that can help in improving the company’s outcomes.