Remaining relevant in the modern era takes a lot of elbow grease and careful planning. Consumers these days are savvy enough to know when it's time to jump from one company to the next when they know that the grass is greener on the other side.
The same applies to your customer base too, and without a strong customer retention plan, statistics show that you could churn anywhere between 10 and 25% of your customer base.
All is not lost, though if you've convinced a customer to come on board, buy a product or subscribe to a service, then you've done the hard yards already.
Now all you need to do is develop a customer retention strategy that incentivises loyalty. This piece shines a light on seven strategies you could use to establish a solid and dynamic customer retention plan for 2021 and beyond.
What is customer retention?
Simply defined, it's the concept of dissuading customers from jumping ship to a competitor through a series of incentives and loyalty programmes.
Most businesses will often place more of their focus on acquiring new customers rather than solidifying the relationships they have with their current loyal customers.
In fact, reports suggest that up to 44% of businesses prefer to onboard new customers, while only 18% are spending their time developing an ongoing customer retention plan.
You've heard it a million times before, but it's certainly true to say that customer retention requires much less time and capital than new customer acquisition, up to five times more in some cases.
Why is customer retention crucial?
Repeat customers are the bedrock of any business' revenue stream. And the more frequently they buy from you, the more likely they are to do it again and again.
According to recent statistics, if customers buy your product or service once, they're 27% likely to do so again. However, if you can persuade customers to make a second or third purchase, they are 54% more likely to continue buying from your business.
The positive news here is that you've already done the hard graft by getting the customer on board in the first place, and the statistics show that you'll have an easier (and cheaper) time creating further purchase opportunities for current customers, rather than looking elsewhere for new ones.
Constructing your customer retention plan
The most effective customer retention plans run parallel to business goals and can be scaled and evolved. For instance, your goal may be to increase revenue by X amount in Y amount of time.
In this case, it's a good idea to align your overall business and retention strategies to achieve this end. One of the things you may choose to do to this is to split your sales team into two groups — new sales and sales retention.
No matter the niche in which you operate, your business must carefully select goals that solidify relationships and increase customer retention. Now let's explore seven ways in which you can build your effective customer retention plan.
1. Focus on customer experience
This might seem like a rather obvious point. Still, it's essential to bear in mind that your interpretation of quality customer service may differ from the experience that you're offering to your existing customers.
In fact, this is a common problem according to the statistics that show 75% of organisations thought themselves to be customer-centric. Still, on the flip side, only 30% of their customers agree.
Studies also suggest that 80% of consumers are willing to part with more cash for an improved experience.
To give your customer experience a leg up to the next level, consider:
— Investing in ensuring that each customer touch-point is dependable and consistent. In other words, your customer should feel valued whether they're contacting you through a phone call, an email, or live chat. This should apply to brand new customers and loyal ones alike.
— Offer a range of customer contact channels to accommodate a range of communication requirements. Remember that not everyone has the time to wait on hold during office hours.
— Ensure that an appropriate individual manages any customer query in your business. For example, if a long-time customer is having an issue, then the individual that manages the account should be the one to solve the query. This level of customer support personalisation is what keeps customers coming back.
2. Refine the onboarding process
The onboarding process will differ based on your business niche. But the aim, no matter where you're operating, is to offer education to the customer about what you can offer them.
Of course, you don't want to be throwing tonnes of information at them about your business philosophy and how you like to work. However, at the same time, without that added personal touch, you run the risk of leaving your customer in the dark.
Once a customer buys or subscribes to your product or service, it's essential to let them know precisely how and why this solution will help them in their everyday or professional lives.
That could be as simple as a welcome email highlighting some commonly asked questions or something more human, like a call from their account manager.
3. Formulate a customer satisfaction survey
There's nothing wrong with sending a quick online survey to your customers to gain a deeper insight into what you're doing well for them and what needs a bit of work.
While it's impossible to please 100% of people 100% of the time, surveys allow you to spot patterns you might have missed. A robust customer feedback survey should include a good mix of multiple-choice options and larger text fields to allow for a more in-depth understanding of what your customer thinks and feels.
Sit down with your teams and take the time to formulate a customer satisfaction survey that you can send out once or twice a year. This allows you to drop into the shoes of the customer and understand the landscape of your sector.
4. Understand your community
The modern consumer is increasingly aware of social, political, and economic causes, which means your business must be too. Customers are far more receptive to their social responsibilities, and they hold the companies they interact with to the same standards.
It's not necessary to undertake a sophisticated Corporate Responsibility Scheme if you're still a relatively small business. Still, it is a good idea to nominate a meaningful charity and work with them to show your customers that you care about your community.
It doesn't mean that you need to give away thousands; it could be as simple as giving talks in schools, offering your services for free or volunteering — the key is to be creative.
Now more than ever, customers wish to feel a connection with the business they're dealing with. It's no longer appropriate to be a cold, corporate entity without a face.
5. Offer vouchers and discounts
It's easy to forget sometimes that each number on a spreadsheet is a human being that has decided to spend their hard-earned money on your products and services.
In the end, all your customers are human, and all humans love the feeling of being appreciated. You can show your customers that you care through occasional gifts, vouchers, and discounts.
There are a few ways you can do this:
— Offer them a discount on their subscription.
— Offer them money-off vouchers for their favourite products.
— Send them small gifts and trinkets on their birthday and other occasions in the year.
Of course, when you decide to do this, it's essential to let the customer know that you are treating them simply because you appreciate them and you value their ongoing loyalty.
Offering items that surprise and delight your customers gives them a genuine feeling of care, thereby encouraging them to remain loyal to your business. It also takes your brand to the next level.
One of the first things that people will do when receiving a gift is tell their friends and family and post pictures across their social media accounts – this increases your social media presence and word of mouth appeal too.
6. Actively communicate with customers
It's super important that you create an atmosphere within your business whereby the customer is essentially an extension of your internal team and vice-versa.
This means that everyone associated with your business should be kept abreast of new products, evolving services, price changes and exciting developments.
The easiest and most effective ways to do this are creating a monthly email newsletter and communicating on social media.
7. Keep it personal
As a side effect of a modern business operating in a digital era, you have access to a range of customer data. Whether you like it or not, it is down to you to protect this data and utilise it to make the customer experience better.
Before you even think about contacting a customer demographic, you must segment them to ensure that you're conveying information in the way they'd want it to be delivered and their interests.
No customer wants to be made to feel like a number on a spreadsheet, and by extension, no one wants stock standard emails, texts or social interactions that feel like they've been sent to absolutely everyone.
By developing a more personalised experience, you can draw your customer in and give them a transparent, personal insight into your business and how it operates.
Keeping yourself ahead of the chasing pack is a tough task in an area where distractions and the promise of greener pastures over the bridge are all around us.
However, with the right attitude, skill sets, and customer retention strategy, you can formulate a retention plan that develops relationships and reinforces loyalty too!
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