In business, healthy growth is typically prioritised over all else. The result is that salespeople and business owners spend a significant portion of their time chasing new opportunities – a fine approach, but not if it results in current customers falling by the wayside.
Achieving a good rate of customer retention isn’t sitting still; it’s about creating a firm foundation upon which your business can blossom. But why exactly is it important, and how can you craft a powerful customer retention strategy for your business?
Why Customer Retention Matters
There are several significant reasons why retaining customers matters to your business:
- It increases profits – 2014 research from Harvard Business Review found that a 5% increase in customer retention can boost profits from between 25-95%. As customers are retained, your relationships with them mature and deepen, unlocking more lucrative work.
- It costs less – Compared to spending resources on acquiring new companies to add to your business’ client roster, research from the National Law Review found that it costs five times less to keep current customers on your books.
- It helps you sign new customers – Far from hamstringing the ability of your sales function to gain new customers, retaining customers and fostering deep relationships with them increases the likelihood of them referring you to their other partners, suppliers – and in the case of larger companies – divisions. Bain and Company found that repeat customers refer at a 50% greater rate than single-time customers.
- It’s great for your reputation – Alongside gaining referrals, businesses that retain their clients benefit from the reputational boost that comes with developing high-quality, longstanding relationships, both from word of mouth and marketing initiatives such as case studies.
What Strategies Can You Use to Improve Your Retention?
To unlock these benefits, there are several approaches you can deploy to earn the ongoing trust and custom of your current customers.
Gain Customer Feedback
If you want to improve your service and make sure that your customers’ needs are being met, you need to find out how your company is doing and the ways in which it might improve. Contacting customers is a crucial part of this. By using email marketing automation you can efficiently contact clients en masse, allowing you to easily gather information on your performance.
From here, you should analyse the data to create both overall and client-specific survey snapshots. These will give you insights into how to improve your service, a benchmark to perform against, and will likely improve your relationships – if you act on the advice given.
Improve Your Customer Service Experience
Nothing is more frustrating than dealing with a supplier that has poor customer service. If you are unavailable to your customers, they will grow unhappy and leave for a competitor that is more attentive.
However, a balance should always be struck between good service and inefficient overservicing. But more often than not, opening yourself up to customers and ensuring the best level of service possible will only do good things for your relationship.
Post-Purchase Care Is a Must
Never stop caring for your customers, even after the payment lands in your business’s account. Whether that’s following up with customers to ensure they are enjoying their product or service or ensuring they can quickly report problems and have them rapidly rectified, post-purchase care will provide a cushion for those unavoidable occasions when service slips.
Reward Loyal Customers
By introducing discounts, rewards programs, or treating customers to meals and activities after business meetings, you can make your appreciation known, as well as getting to know clients on a more personal, one-to-one level.
Do you have a special approach to customer retention that has worked wonders? Let us know in the comments section.