Businesses often forget that finding customers is less than half the battle. Without strong customer retention, profits are bound to be unstable and growth restricted.
According to the Harvard Business School, increasing customer retention rates by 5 percent increases profits between 25 and 95 percent. The growing importance of customer retention is commonly attributed to the internet, which allows customers to easily source alternative products and services. Here are a few proven methods to cut down on that customer churn.
Trust is quintessential to customer retention. Break a customer’s trust and you’ve almost certainly lost their business. A survey from Concerto Marketing Group found that 82% of customers will stick to your brand if they trust it. So, how does a business build trust? Methods could include maintaining strong communication or keeping transparency with customers. Complaints can also be a good opportunity to build trust. By showing customers you have acknowledged their feedback and taken it on board, they are more likely to trust your business in future.
Email marketing is another useful (and accessible) customer retention tool. This form of marketing keeps your business’s name in the back of your customer’s mind and acts as an opportunity to spread the word about offers and content available. This provides a great ROI. With online email marketing tools like MailChimp or Dotmailer, there’s no reason not to be using email marketing to keep customers engaged with your business.
Award your customers for their loyalty! Everybody loves loyalty schemes, whether they are loyalty cards, vouchers or personal thank you cards, it all helps! Customers want to feel wanted. By acknowledging their loyalty, not only are they more likely to recommend your business, they are more likely to keep coming back in the long run. This means longer term profit for your business.
The integrity of your product or service is a basic, but crucial, aspect of customer retention. In the long run, unless a product or service is up to scratch, profits will drop. This means regularly investing in your product or service and watching what competitors are doing. When customers provide genuine feedback, take it on-board and implement it. Not only will it make them feel valued, it will help keep your business’ product or service competitive, reducing customer churn.
Make it personal. This is an increasingly popular method, and for good reason too! A psychology study recently found that waiters who serve their customers a second set of mints typically received a 21% increase in tips. Why? Researchers concluded personalisation is what triggered an increase in tips. This can be practised in all areas of business. Handwritten thank you cards and personal emails are just a couple of ways this can be achieved.
It’s fair to say that you need a strategy. Building on customer retention is mandatory for any business to ensure long run profits. If you’re just not sure how to improve your business’s customer retention. Investing in a specialised service in this area is a wise way to get started.