Humans have a natural inclination towards novelty, such as exploring new places, trying new things, and meeting new people. However, novelty does not always equate to being superior. In the context of business, attracting and retaining long-term customers is equally, if not more, crucial than constantly seeking out new clients.
Customer Retention
Boost your revenue with a strong customer retention strategy. Customer retention is like water retention, only you’re holding onto something you actually want: customers.
The aim of implementing a customer retention plan is to establish enduring connections with customers, ensuring that they continue to purchase your products or services. This involves creating a positive customer experience, fostering confidence, meeting expectations, and enticing buyers to opt for your brand over inferior alternatives.
Why does customer retention matter
It is a common mistake for many companies to invest heavily in gaining new customers while neglecting the importance of retaining existing ones. However, having a robust strategy for customer retention can bring about numerous advantages.
It’s cheaper
Retaining an existing customer is usually more cost-effective than acquiring a new one, with the latter costing approximately five times more. Although some professionals doubt this fact due to the availability of predictive analytics tools, it remains generally accepted that focusing on customer retention yields greater returns for a company.
It generates revenue
Suppose Madonna declares a stadium tour (which she already has). Will she be able to fill arenas solely with her Gen Z supporters purchasing tickets? Absolutely not. She requires her original, familiar fans to spend money. Now relate this mentality to your enterprise: Your business’s profits are reliant on your devoted clientele – your lifelong admirers.
For those who may not be familiar with pop culture, here is some evidence supported by data that demonstrates the significance of customer loyalty. Bain & Company has reported that a 5% increase in customer retention rates can lead to a profit increase of 25% to 95%.
Furthermore, loyal customers demonstrate more profitability over time. For instance, in the apparel industry, the typical returning customer tends to spend 67% more from months 31 to 36 of their purchasing history in comparison to months 0 to 6.
Even if you are not currently devising a fresh plan to retain customers, here is something to consider: Monetate’s research indicates that a customer who has made a purchase from an online store is more than three times more inclined to shop with the same company again than a first-time customer.
If you are fond of money, it’s a no-brainer that customer retention should be prioritized.
It creates brand ambassadors
Having satisfied customers is an asset that has immeasurable value. Their satisfaction leads them to advertise your business for free through referrals, social media sharing, and positive reviews. Building a pool of loyal customers results in a powerful and cost-free marketing campaign driven by word of mouth.
Customer retention strategies in 2023
Who doesn’t appreciate an advantage? Enhance customer retention by implementing a loyalty program. A solid customer retention plan will ensure that your retention KPIs remain satisfactory. Unsure about how to begin? Look no further as we have the ideal recommendations for you.
1. Make sure your customer service reps are top notch
This is a significant finding from a Gartner study that indicates customers who have a satisfactory customer service encounter are 82% more liable to make a repeat purchase or renewal and 97% more likely to recommend your company positively to others.
Conversely, findings from The Northridge Group indicate that a single negative customer experience can prompt 72% of purchasers to change to a rival company.
It is essential to promptly address a customer’s problem or concern, making it crucial to evaluate if your company provides a quick response time. After that, assess if your service is satisfactory. The representatives represent your company, and therefore they should remain composed, courteous, and motivated to assist clients in finding solutions.
Sending out a training video for your staff to watch from anywhere in the world can be a great way to refresh their skills in providing excellent customer service. It’s worth noting that 89% of employees find video to be a useful training tool.
2. Streamline the onboarding process
Providing clear instructions on how to get started is essential in ensuring your customers’ prompt use of your product, which would result in them quickly sharing their positive experiences.
By combining informative audio with digital screen recordings, screencast videos provide a captivating tutorial experience. Similarly, demo videos can effectively attract and engage potential customers as well.
3. Invite customer feedback
To show clients that you appreciate their input, ask for customer feedback through various methods such as sending surveys, making phone calls, and incorporating interactive features like polls, multiple choice questions, and open-ended responses in videos designed for customers.
By doing so, you can detect any possible shortcomings in your company and utilize data to make informed choices regarding product enhancements, website features, and other related matters.
To start, be truthful by expressing your intent to provide valuable content along with discounts and promotions, while requesting assistance with generating content ideas.
The next step is to put into action some of the suggestions you receive and make a follow-up. Neglecting to respond to others’ input can lead to a sense of dissatisfaction and letdown.
While you may not be able to incorporate every idea you receive, it’s important to acknowledge the ones that come from your customers. In your email, make sure to mention that the content suggestion came from a customer to show that you appreciate their input and are listening to their feedback, regardless of whether or not the idea is ultimately implemented.
One important thing to note is that in order to facilitate a seamless survey response experience, this email necessitates being sent from a monitored inbox. This allows recipients to respond to the email as they would any regular email thread and to simply hit “reply” should they require assistance when completing the survey.
Obtaining content ideas from your subscribers in the right way can foster loyalty and support your content creation efforts, resulting in a mutual benefit.
4. Launch a loyalty program
By providing perks and rewards, loyalty programs encourage customers to spend more and discourage them from switching to competitors. For instance, a customer might choose Y coffee shop over X coffee shop simply because they are one small dark-roast away from earning a free latte.
5. Personalize the consumer experience
Inundated buyers receive countless marketing messages daily, so brands that tailor their communication have the highest likelihood of standing out and capturing their attention.
Having loyalty programs gives brands an advantage as they are able to utilize consumer data to create a customer-focused strategy.
Increase potential for cross-selling.
Cross-selling refers to the practice of a company providing products that cater to the related requirements of its customer base. This can be seen when an insurance provider offers both car and home-owner’s insurance, or when a cosmetic brand sells makeup and makeup remover. By cross-selling, a customer is once again engaged and their overall worth to the company is amplified.
7. Show your values
Customers prefer to purchase from businesses that share their values as it creates a sense of connection with the brand. It is important to consider your company’s values and be bold in sharing them with your customers. Creating an inspirational video is an effective way to communicate your message.
8. Engage your customers
Interact with your audience via social media platforms and give them a sense of belonging to a community.
The goal is to create an inclusive shopping experience with your brand, where consumers feel like they are affiliated with something trendy, intelligent, or amusing. To achieve this, it is important to involve your customer base. This can be accomplished through social media interactions, reposting their TikTok videos, and inviting them to share their opinions through customer testimonials. It is crucial to keep things engaging for them.
9. Education-based post purchase emails
Utilize your customer support staff and dispatch emails that address commonly raised queries. This method is an excellent means of keeping in contact with clients and providing them with useful information.
Frequently, customers have inquiries concerning products but fail to get in touch with customer support. Responding promptly to such inquiries via email can enhance their experience with your products and establish their trust in your brand.
This additionally enhances customer contentment with their previous purchases, thereby raising the chances of their future purchases, all without needing to send promotional emails. Moreover, if you already acquire insights from your customer support team for FAQs and other resources, incorporating this data in your email amplifies the impact of your endeavors.
10. Unique product uses and hacks
Discovering unconventional ways to utilize nearly every product is possible. Drawing attention to these can result in a twofold increase in sales.
By showcasing innovative ways of utilizing a product, existing customers can extract additional benefits from it. This heightened level of contentment with their prior purchase will incentivize customers to buy again in the future.
After discovering the various ways to use a product they previously considered useless, potential clients may consider making a purchase. Moreover, these emails serve as an effective tool as they portray a helpful rather than promotional tone, even if a recipient is not interested in the highlighted products.
11. Customer spotlight email
Your satisfied clientele can be your most effective marketers. Featuring customers who have endorsed your merchandise on social media is an excellent method to acknowledge and talk to prospective customers.
It’s advisable to send a brief survey with five or fewer questions to individuals who have shared your products on social media. When crafting the questionnaire, consider asking questions that weave product highlights into a narrative rather than posing simple “yes” or “no” questions.
Make sure to ask a question such as, “For what reason were you in search of a product like this?” or “What issue were you attempting to resolve when you discovered this product?” This gives your customers the opportunity to explain how they came across the product.
By highlighting products for prospective customers, this email maintains customer engagement without making the callout too product-focused.
Encourage customers to provide additional information on how they utilize the product, their favorite aspects of it, and any advice they may have for maximizing its benefits when answering the remaining questions.
Don’t forget to include a buy now button in your customer spotlight email’s conclusion.
12. Message from the Founder or CEO
The best-performing monthly email from H.V.M.N. is sent by its founder every month.
These emails can contain various forms of content such as your founder’s message which can become the basis for the inception of your products, updates on ongoing development, what’s in store for your existing products, and industry trends. Additionally, an exclusive glimpse into your company’s operations or how your products are manufactured can also make for excellent content.
By sending out these emails, your brand becomes more relatable and enjoyable, thus creating a stronger customer relationship that will ultimately lead to increased revenue through email marketing.
By generating interest in your products through these emails, you can also see an increase in sales in the near future.
To ensure the effectiveness of email messages from your founder, it is important to send them regularly. While it is recommended to send a founder message every month, the crucial factor is that your subscribers are aware of when they will receive these messages.
13. Product surveys
Asking for your customer’s feedback is important, whether or not they enjoy your products. However, it’s crucial to present the request appropriately since customers are knowledgeable and recognize the value of their opinions.
There are several approaches to accomplish this. One is through a letter format where a representative from the company requests your opinion. Although it’s not a genuine one-on-one encounter, it has a similar impact. Other individuals provide a reward, such as a coupon code or an Amazon gift card, which typically produces superior outcomes and communicates appreciation for their time.
One advantage is that you obtain customer perspectives and may discover unexpected recurring patterns. This can be transformed into fresh email content by sending a follow-up message that discloses the findings or features some of their suggestions.
Side notes
The significance of customer retention can often be disregarded due to the emphasis on customer acquisition. However, the success of your business depends on customer experience. Therefore, take action by analyzing your company’s performance, figuring out the arithmetic, and revamping your retention plan today.
