Customer Retention Strategies
Customer retention strategies generate big returns. Frederick Reichheld, the inventor of the net promoter score, shows increasing customer retention rates by 5% increases profits by 25% to 95%.
Depending on which study you believe, and what industry you’re in, it costs anywhere from 5 to 25 times more to acquire a new customer than retain an existing one.
What are customer retention strategies to consider? The folks at Tech.co have written a definitive guide. Here are the 11 most tried and true customer retention strategies.
#1: Invest in customer service
Hiring representatives, purchasing business software, or even experimenting with chatbots can have a surprisingly large effect on customer experience. Depending on your budget, there is a customer service solution to fit it. And its impact on purchasing decisions is large.
#2: Act on customer feedback
Google reviews and social media posts are great to get an idea of how your customers feel about your business. But you need to reach them while their experience is still fresh in their minds. For example, use automated emails encouraging reviews after purchases. This lets them know they are a valued customer and their opinions matter.
#3. Utilize automation
Automation is built into a lot of business software nowadays. This means your team is freed up to manage the more complex tasks, like managing serious customer complaints in real-time. The best use of automation when it comes to customer retention is chatbots. A good chatbot will be able to field up to 80% of your customer support requests, opening your team up to manage the more challenging issues.
#4. Reward customer retention
If you really want to show your customers that you appreciate them, you need to be active in this role. You have to show your customers that you value their loyalty through rewards and listening to their complaints in a meaningful way. One great way to show loyal customers that you appreciate them is with a referral program. By offering customers something like $50 towards your online store when they refer a friend, it shows them that you’re willing to provide them with rewards for their brand loyalty.
#5. Pursue personalization
Everyone likes to feel special, and strangely enough, that can come from something as simple as remembering their name. The most obvious commonly-found personalization strategy would be the “recommended for you” section found on many online retailer websites or the “game of the day” section on online games like Im a Puzzle. The data show personalization brings buyers back.
#6. Embrace email marketing
Cultivating an email list and utilizing it to share valuable information with your customers make a huge difference in whether customers decide to return to your business or not. Just remember not to overload users with information via newsletters. With nearly 300 billion emails sent every day around the world, make sure you only send out important information that your customers will truly value. With an ROI of 42-to-1, email, although seemingly old fashioned, maybe #1 of our tried and true customer retention strategies.
#7. Build community customer retention
Unlike sending newsletters, building a community is a bit more abstract. You’re going to have to evaluate the best way to do so for your particular business. Some of the customer retention strategies for building community are loyalty or rewards programs that offer returning customers with exclusive sales, deals, and other perks, just for those that engage regularly. Another is online forums. They allow users to communicate with each other while being guided by experts familiar with your products or services. It’s worth it to build community. Because the numbers show community members spend more.
#8. Be socially conscious
The modern-day consumer is as vigilant as ever, and if you hope to retain them, you’re going to need to be willing to give back, be inclusive, and put the good of humankind ahead of your shareholder returns. Because your customers buy from their hearts as well as their heads. One prime example of how businesses make sure they are socially conscious is partnerships with like-minded charities. More customers choose brands that share their values.
COVID-19 Customer Retention Strategies
#9. Prioritize compassion
Make sure you’re reassuring customers that your business is committed to addressing the many problems facing the world today in a meaningful way. Adobe has done a great job, offering its incredibly popular (and very expensive) Creative Cloud program free of cost for students affected by the closure of schools due to the pandemic. With more than 862 million children out of the classroom, it’s a decidedly compassionate move.
#10. Don’t be patronizing
While somber music and compassionate messaging might seem like the right move, consumers have pushed back substantially, noting that the “we’re all in this together” messaging doesn’t exactly pair well with the “buy more insurance” messaging that typically follows. Pandering and patronizing your customers is never a good move, but it’s infinitely worse now that the world is an entirely different place.
#11. Exude transparency
Press releases, customer service emails, and social media posts should be filled with updates on how you’re helping employees weather the storm, how your business is planning to update policy to reopen safely, and when customers can expect at least a modicum of “back to normal.” Uber has done an uncharacteristically good job on this one, sending out regular updates to customers via email, which include instructions on how to wear masks, mask and face-covering policies (they’re mandatory), and the new “no front seat passengers” rule, to cut back on potential risk.
Are you using any of these customer retention strategies now? Should you be? Are you looking for help in implementing customer retention strategies for your business?
