Acquiring a new customer can cost 5X more than retaining an existing one. For a business, its greatest marketing resource can be its current customers. Customer retention can predict current customer satisfaction, repurchasing decisions, and customer engagement.
It is crucial to focus on and implement as many resources to retain existing customers as to sell to new customers. This will not only enhance brand loyalty but overall help ROI because your current customers are your business’s gold mine. It is more than answering emails and helping with onboarding tasks but about creating a relationship from the start that promotes strong communication, trust, and mutual expectations.
Here is a breakdown of customer retention and tips for your business to implement strategies:
Why Customer Retention Is Important For Business
To be clear, the process of gaining new customers is valuable and necessary to grow your business but sometimes companies direct all their marketing efforts solely toward recruiting. Maintaining clients and ensuring they are recurring customers is necessary and inexpensive. Recurring customers not only are willing to spend more for a brand they are loyal to, but they are more likely to refer the business to friends and family.
If a customer is satisfied with the business, they will bring in new customers free of charge. Most brands do not realize the impact current customers have on their marketing efforts. Although, if a business does not implement a customer support strategy and is proactively supporting its existing customer, they will not stay loyal.
How To Measure Customer Retention
1. Determine Your Success Objectives
To improve something you need to figure out what it is that needs to be improved. Are customers' life cycles too short? Is it taking a while for customers to repurchase? By asking yourself similar questions you will be able to determine what the potential customer retention problem is. Once the problem is identified, you can determine what success means to your business.
For example, if you want the customer life cycle for your business to be X, then you can track your achievements more accurately. Determine what areas of your business need focus, therefore, you can spend more time and resources measuring things that matter.
2. Identify A Way to Achieve Your Success Objectives
Once you determine what success means to your business you need to implement a plan to get there. Customer retention is ideal for determining how well customers like your business. Do not hesitate to offer customer surveys or other ways to share their opinions and thoughts on your business. Their voice matters and helps you understand the customer’s buying habits. By narrowing down the factors that go into improving customer retention, you are more likely to make accurate decisions on your path to success.
3. Constantly Monitor and Adjust Your Goals
It is important to track your metrics, so you know if you are reaching your goals. It could be beneficial to analyze your metrics on a weekly, monthly, or quarterly period. If you are consistently tracking during the same time frame your measurements will be more accurate and you will be able to understand when your business is most desirable.
In the business world, there are constant unexpected changes. Therefore, even if your goals are being met, you may have to adjust accordingly to your customer’s wants and needs. If you want customers to stay loyal to your business and keep coming back, you need to be willing to adjust goals in their best interest.
Key Strategies For Implementing Customer Retention
Build trust and personal interactions. If your customer feels connected to your brand on a personal level, it will be difficult for them to leave and choose another company. From the start, build a foundation that your clients feel comfortable and willing to stay loyal.
Utilize social media. Interact with your customers on social media platforms through comments, direct messages, and story interactives. If they follow your business on social media, and your business is actively posting, then you will be in the client’s mind consistently.
Incentivize loyalty. People are more willing to do things when they are receiving something in return. For example, run a promotion for your customer that offers them a discount on a future service if they refer 5 other clients to your company. People will listen more to what their friends and family recommend, therefore, always keep a strong relationship with your potential clients to ensure they can speak positively about their experience.
Are you certain your current customers are happy with their experience? If you can not answer yes to that question, then your business needs to step back and focus on customer retention. Not only will balancing customer retention and customer acquisition benefit your customer satisfaction levels, but will save your business money! If you can balance both, you will be less pressured to acquire new customers if your existing ones continue to buy.
Our team at GenTech Marketing will not only help increase your business revenue, but has the expertise to take your business to the next level.