Keeping your customers happy might seem like common sense, but that doesn’t mean it’s a cinch to pull off well. Sometimes you’ll need to round up an extraordinary amount of patience and composure in the face of challenging circumstances.
Though more often, effective customer retention hinges on your ability to understand your target audience and make a connection. When you pay close attention to what most delights your existing customers and cater to those wishes, you’ll continually unearth opportunities to make more sales.
Sounds like the perfect outcome for both sides, doesn’t it? The next step is understanding how to slide all the puzzle pieces into place to create the ideal customer experience for repeat business. To simplify the process, we’ve gathered everything you need to learn how to improve customer retention strategies.
Why Customer Retention Can Make or Break Your Biz
According to Gartner Inc, 80% of your future revenue will come from a mere 20% of your existing customer base. A hefty statistic like that is hard to brush aside.
Another report claims that previous customers account for 60-70% of sales, while new prospects convert between 5-20% of the time. Moreover, a long-held notion states it costs 5x more to attract new customers than to hang onto old ones. That’s a lot to digest!
While endearing your products and services to newcomers remains important, it’s clear that nurturing relationships with existing customers can have a genuine impact on your company’s financial year. Seize the opportunity for ongoing revenue by keeping a customer retention strategy at the forefront of your marketing campaign.
Understanding the Average Customer Retention Rate
Every industry has a unique set of challenges, and the average customer retention rate can vary widely. You’ll find some products and services promote continuous business with little effort, such as the energy and utility sector. Other industries have more sporadic sales from repeat customers. A good example is hospitality services, especially events and travel.
Search for the best opportunities to regain the attention of previous buyers. Try timing communication according to when your customers would be in the market for your top offerings again. Is your business more appealing during certain seasons? Do your products and services need regular maintenance or replacements?
With 44% of businesses prioritizing customer acquisition, you need to position yourself among the 18% minority that understands why budgeting for customer retention is essential. This can place your brand ahead of others in the same arena.
How to Win the Modern Customer’s Heart (and Keep It)
Have you ever heard of buyer personas? They’re part of a marketing strategy that considers the ideal customer so you can get inside their head. When you gather this information, you then know how to react to achieve the maximum benefit for both you and your customer.
Envision the type of person who’d be interested in your products or services. What are their likes and dislikes? What problems are they desperate to solve? How can your company assist them? Jotting all this down on paper can help you map out the best way to approach customer satisfaction.
Conversion may seem like the finish line, but this milestone is the beginning of a new stage in your relationship. Use the following list of tips for customer retention to cultivate ongoing engagement.
1. Be Proactive, Not Reactive
Are you meeting customer expectations? Gathering feedback at every stage of the buyer journey will help you make adjustments to improve your customer experience. However, it’s even better to be proactive about uncovering issues before a customer runs into an unexpected hiccup during the process.
Keep in mind that 60% of local consumers say ease of doing business is why they come back. So rather than waiting for a customer to tell you what’s wrong, strive to create a smooth experience from start to finish. Calling upon user experience (UX) specialists and quality assurance (QA) testers can help you address pain points before public consumption.
2. Listen, Learn, Implement
As stated above, you’ll maximize goodwill by listening to customer feedback. But most people won’t bother sharing their impressions without a gentle nudge. It only takes a few moments to send quick customer surveys or request a review via Podium. Use these enlightening responses to diminish customer complaints and fine-tune your user experience.
You can also build trust with customers through transparency during this process. Showing how you plan to implement their feedback or address poor experiences will do wonders for your reputation. Just remember that follow-through is an absolute must. To keep customers, avoid empty promises, and stick to sharing what you know you can deliver.
3. Reward Your Loyal Customers
Gaining customer loyalty is especially effective when you offer rewards for repeat business. Accenture notes that customers spend 57% more when they are loyal to a brand, so why not lean into their devotion with tempting incentives?
A loyalty program is a fantastic addition to your customer retention strategy. Offer freebies with purchases, discounts upon filling punch cards, or periodic coupons for anyone who signs up for your mailing or text list. You’ll gain the most traction by providing an app that makes it easy for your biggest fans to locate deals on the go.
4. Decrease Your Response Time
Prioritizing your customers is vital, and this fast-paced world doesn’t cut much slack. Sluggish responses push people to seek answers elsewhere. In fact, a Salesforce survey uncovered that a massive 92% of consumers say they’re more likely to make additional purchases after a positive customer service experience.
The always on-call model isn’t always smooth for smaller businesses with limited resources, modern technology provides some relief. There are many ways to route calls and automate communication, providing the information customers need without friction.
5. Use the Same Communication Channels as Your Customers
Your customers are everywhere, and if you don’t meet them on their terms, they might forget you exist. This means you’re going to have to figure out their favorite social media hotspots, their email mailing list habits, and their text preferences.
Text messaging is a popular method for reaching customers today thanks to the ubiquitous nature of smartphones. Podium can help you with your SMS marketing campaigns thanks to our powerful planning tools that bring effective communication to small businesses.
6. Offer Convenient Payment Options
Not many consumers are counting coins at the register anymore—thank goodness. Digital payment processors have made purchases easy, and improved convenience continues to enchant customers alongside Buy Now, Pay Later options.
Customers want flexible payment choices. Don’t make them bend over backwards to pay you. Focus on the methods that streamline transactions, including text-to-pay systems. Almost one-third of consumers prefer mobile payments, and Podium can help you deliver secure links for bills via text.
7. Prioritize Your Employees’ Happiness
If your employees are zapped of all joy, how can you expect to keep your customers happy? Start by creating a positive work environment that values everyone involved. Equip your employees with the tools they need to do their job well and manage their workloads without fatigue.
Employees who are in good spirits are more likely to handle customers with a pleasant, supportive attitude. When workers are tired or stressed, it affects customer interactions and retention rates. Avoid the pitfalls of low morale among employees by fostering a supportive workplace that understands every contributor matters.
Signs Your Customer Retention Efforts Are Paying Off
So, how do you know whether your efforts are sticking? Complex data isn’t always required to reveal whether you’re retaining interest through great customer service.
Here are some quick indicators that your customers are satisfied:
- You have a low churn rate—your customers stick around.
- You’re getting regular referrals from your customers.
- You have an active and engaged social media following.
- You have plenty of positive reviews and consistently get more.
Don’t despair if you’re not able to tick off every box yet. Like any lasting relationship, earn trust and dedication over time through continuous, meaningful effort. Start small and celebrate each win along the way.
Also, remember that your business is unique and so are your metrics for success. Amplify your impact by trying out the tips for customer retention above along with our in-depth guide: The Secret to High Customer Retention. This helpful cheat sheet will further demystify customer retention so your brand remains relevant after every new conversion.
