What is Customer Retention?
Customer retention is an umbrella term for all the ways that someone who has made a purchase through your company can continue to purchase from you. This can occur in a variety of forms:
- You may have the ability to "upgrade" a subscription after an initial purchase.
- You may have a variety of products and services.
- You may have yearly renewals or the option to "reactivate" a service at a given time.
What are the Benefits of Investing in Customer Retention?
The statistics are pretty clear: it is much easier to make money by retaining past customers than by recruiting new ones. Destination CRM estimates that new customers cost 5 times more to recruit than the efforts to keep customers as happy repeat customers.While all companies need recruitment of new customers to grow, you will find that your efforts at customer retention also create word-of-mouth advertising: the more customers you have, the more customers will be talking about what a delightful process you've created.
Start-Up Companies and Customer Retention
Start-Up companies stand to benefit even more than established companies from customer retention efforts. When you aren't relying on a past reputation to carry you forward, you need loyal customers:
- They help you to pay the bills.
- They spread the word to like-minded consumers.
- They give testimonials that help you establish your brand.
Companies who start selling without an excellent customer experience strategy are likely to get a few reviews that make others unsure about the company. Those first few reviews should be incredibly positive, and those same customers should be coming back to you over and over.
Measuring Customer Retention Rate: Noting Reactivations or Renewals
As soon as your company launches, or wherever you are in the customer retention process now, you need to determine what metrics can adequately prove you are retaining customers. This often means tracking re-activations of paid plans, or renewals on subscriptions that initially only lasted for a year or six months. It can also be a part of your CRM tracking system, noting key accounts where a repeat purchase signals that the client was satisfied with their initial purchase. No matter how you sell, you should find a way to distinguish every sale as a new customer versus an established customer.Tracking the customer retention rate, however, is just the beginning. Here are eight strategies that will boost your customer retention rate while making your company a better place overall.
Strategies to Retain More Customers
Solicit Feedback From Customers
The customer experience can only improve if you understand what is most helpful to your customers. Send feedback surveys at strategic moments so that you can get the best possible return rate. Experiment with automating this survey a day after a purchase, a week after the purchase, or a month later, and look at how the results turn out; this information will help you to continue to receive excellent feedback.Getting feedback is relatively easy: processing and responding to feedback is harder! For individuals who respond directly to your sales team, make sure that sales reps follow up! A quick fix and a pleasant response can be all a customer needs to click "buy now" again, but an email that gets lost in your customer service pipeline may be enough to send your customer looking for alternatives.
Improve Customer Experience With Replicable Documentation
Make sure that all generalized or anonymous feedback, including public-facing review content, is reviewed and compiled by a member of sales or marketing. From this information, identify the few changes to the customer experience that could move the needle for the most people:
- Would better response time help?
- Do you need to perform a simple bug fix?
- Is there a confusing spot in the purchase form?
- There could be a wide variety of other potential "small fixes."
Present these changes to the stakeholders in the company who have the power to fix them. Once this has been accomplished, make sure to document why this was done and publicize it among your marketing and sales team. Keep this iterative process going as well: when feedback is received, respond and make a change!
Use Your CRM & Automation to Re-Engage Clients
Customer Relationship Management software allows you to track the journey of any given customer from lead to customer, as well as beyond. An easy "win" for your team is to create a program of re-engagement emails: when a customer has been inactive or hasn't purchased or subscribed for a certain amount of time, create a trigger that sends an automated but personalized email to them to invite them to come back. These emails can also take other forms:
- Requests for any questions the customer has
- Feedback on their implementation of a product or service
- Another question connected to your company's work
These automatic emails do the easy work, but when a customer does re-engage, a sales rep can quickly respond with personality and helpful advice. This partnership between marketing automation and personalized responses really helps your company to go farther and show your customers that they are more than just numbers to you.
Create a Loyalty Programme
Creating discounts, benefits, or deals that are only available to repeat customers is an excellent way to promote your business while rewarding people for ordering from you again. Loyalty programmes can begin with an enticing offer but often include non-discount information as well: sending an e-newsletter about your new products and services, for instance, can be one of the "perks" of the loyalty programme while actually keeping your company in the front of your customers' minds.When possible, loyalty programmes can also involve some form of social sharing or affiliate linking, where your customers can actually advocate for your brand in exchange for a discount or credit toward your product. This is some of the least expensive, most sure-fire marketing you can use if you have the volume of loyal customers to pull it off!
Treat Employees Well to Promote Outstanding Customer Service
This customer retention strategy goes to the root of customer service: your employees. Whoever works for your company is subtly conveying how they feel about the company through their levels of enthusiasm and excitement during customer service calls. Even sales representatives, who want to make that sale, can accidentally tip their hand if they aren't excited about your mission. So, when you create employee satisfaction initiatives, you are also promoting the retention of customers!Low turnover among your staff can actually lead to a deeper well of expertise, which customers notice when they seek answers. Talk to your employees and do whatever you can to make work a wonderful place for them; it will pay off with customer retention. Your employees are closest to their own customers, and if they are excited about working for you, they will innovate in response to your customers' needs.
Use Case Studies and Training to Help Customers Take Full Advantage
If you have a product or service that requires some onboarding or training to make it useful to customers, invest time and resources in creating excellent onboarding case studies and learning tools. These tools are some of the best customer retention tools you have.If customers find it frustrating or difficult to understand the value of a subscription to a software product, they will not renew that subscription. Your useful FAQ and training library will gain you massive dividends in customer loyalty, especially when you have the best onboarding experience among your competitors.
Build a Trustworthy Social and Web Presence
As you create online tools to help people understand your product, you can also build out an excellent, relevant social media presence and blog content. This content serves as great inbound lead generation, but it also helps to establish and cement your reputation as a trustworthy company.By having a substantial web presence, you make it clear that you are well-known and interested in transparency with your customers. Creating web content that you can then promote on social media also keeps your current customers interested and engaged; recycle and re-use content by creating e-newsletters that are tailored to your customers' specific interests while drawing them back to your site for new potential sales.
Document a Customer Delight Road Map
All of these strategies can be implemented, but if they are inconsistently applied, you aren't likely to see the maximum return from your customer retention efforts. As you assign particular strategies to different members of your team, also work on a high-level customer delight road map.Consider the whole buyer journey:
- How can you approach leads successfully early on?
- What interventions help you get feedback along the path to first purchase?
- How do you reach out immediately after purchase with training?
- What resources help the customer continue using your product or service?
- How do you maintain relationships up to the second, third, and further purchases?
Some repeat customers, for instance, may be happy with a coupon here or there at first but who will only truly engage if you launch a loyalty programme. This road map allows you to get a big-picture view of all your efforts and target any spot where you might be unnecessarily losing customer loyalty.We are in the business of developing and implementing high performing growth marketing plans and frameworks. Our Growth Marketing Framework is the heart of our company. Let us show you how ambitious brands accelerate their growth. Contact us for a free consultation today.
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