An entrepreneur must not only work on introducing new products or services in their business but also retain the existing customers and find new customers.
Every business owner has to learn the art of retaining customers for the long haul. We came up with wonderful customer retention strategies.
There is also a formula that you should know about to calculate the approximate customer retention percentage of your business for a particular timeline.
Let’s get to know all the interesting facts now, shall we?
What is customer retention?
Customer retention from a marketing perspective is the process of making an existing customer continue buying your products/services over a period.
The concept of customer retention differs from lead generation or customer acquisition, as retention means retaining an EXISTING customer who you have already converted into a sale.
Why is customer retention important for any business?
The success rate of selling a new product or service to an existing customer is 60-70% whereas, selling the same to a new customer is just a 5-20% chance.
If you can increase your customer retention rate just by 5%, your profits will increase by 25-95%.
(How cool is that!)
These are the 4 main reasons why you should be taking customer retention more seriously!
- It increases the revenue and the profit margin of the business.
- You’ll be receiving more valuable feedback from your customers.
- It enhances the brand image and spreads brand awareness.
- It reduces the promotional expenses of new products or even the existing ones.
How retention marketing saves time and resources? (+ formula to calculate the customer retention)
The retention marketing tactics we mentioned below encourage existing customers & excite new customers to keep doing business with your brand.
As a business owner who has a strong retention strategy to keep your customers in the loop, you’ll be saving a lot of money and time.
- You don’t have to keep coming up with new ideas to market your new product lines.
- You don’t have to hire more personnel to bear with the marketing and promotional activities.
- You don’t have to spend money on making those ideas turn into a reality.
Let’s see how you can calculate your customer retention rate now, shall we?
*The period could be quarterly, half-yearly or annually, or even lesser.
Customer retention rate = Number of customers by the end of the period - Number of new customers acquired during the period / Number of customers at the start of the period * 100
Note: Higher the customer retention rate, the better.
What customer retention strategies are you missing out on in 2021?
These are some of the customer retention strategies used by prominent brands to help you get a better understanding of your customers and their needs.
Let’s get to know these strategies to implement them in your business!
1. Rewards based on usage
Any customer (new or existing) will be interested in your product or service based on the quality and the customer service.
But to keep them interested in your business, it is important to give offers and rewards to users occasionally to induce their liking towards your products.
Let’s take Google Pay, they give rewards (scratch cards) based on the frequency of the transactions, the amount, and various other factors.
Apart from the convenience of using an app to transfer money, they have also induced curiosity amongst the users.
2. Work towards customer loyalty
Earning customer loyalty is a task now. As there is a high level of competition in the market. Even though you enter into a market with the first entrant advantage, within a few years you’ll see yourself competing with your rivals.
Therefore, to sustain in the market, working towards strengthening your customer loyalty factor is one of the major aspects to consider.
- Give them a taste of your new product for free.
- Personalizing the services, giving extra attention towards after-sales service.
- Give out value-based content to show customers you care beyond sales.
And also remember not to compromise on the quality of your products or services.
3. Update your customer value proposition
The customer value proposition of your business must be updated according to the changing needs of the customers, their tastes, and preferences.
The ability to convey the benefits and features of your product or service by describing the needs of your customers is an art.
Use an exceptional marketing team who understands consumer behavior to analyze your current value proposition of the product or service and upgrade it to attract customers.
4. Interact with your customers appropriately
Customer interaction is one of the core requirements of running a business successfully. Social media has been very impactful with people nowadays.
Create social media accounts on all platforms that are related to your demographics to understand the buyer’s intent.
Interact through your social media content, comments section, and even your blogs to share information that might be helpful to them.
5. Simplify the onboarding process
The underlying concept of using apps is to match with the comfort of your customers. Simplifying the onboarding process can help immensely with more customers downloading your app and signing up for checking your products or services.
Use single-step login or give multiple login options through social media and such to convince your customers.
6. Inclusive marketing
Inclusive marketing is based on the resources that you give out to your customers based on your products or services.
Giving out free newsletters or e-books and other resources for existing customers on your mailing list is one of the concrete ways to keep them in the thread.
To excite your existing customers more, include them in your mailing list and give them your free resources to keep them interested.
These are some of the customer retention strategies that will work for keeping in touch with your existing customers. This might also help you in generating new potential customers to win over!
The key to all these strategies is consistency and top-notch quality. Cheers!