5 Strategies to Increase Customer Retention
Every business owner wants their company to reach as many customers as possible. But it’s not as simple as acquiring tons of new customers; in fact, that’s a whole lot harder than holding on to the customers you have.
This is why customer retention is so vital; it’s more efficient and cost-effective than constantly starting from square one. According to a study from Harvard Business school, increasing customer retention by 5% can increase profits by up to 95%.
With that in mind, here are some of the most effective strategies for holding on to your customer base.
Reward your best customers
If your goal is customer loyalty, give them a reason to be loyal. For example, consider creating a program where customers earn a discount if they reach a certain spending target. You can set up a gamified “tier” concept to encourage people to make more purchases and unlock more rewards.
You could also send customers a special customized gift once they’ve hit a particular loyalty goal; this shows them that you value their business on a personal, emotional level. Smaller, local business who can afford a face-to-face interaction might try something even personal, such as taking all of their best clients out for a fancy dinner once a year.
Keep things personal
For a customer to feel emotionally engaged with your brand, you have to take the first step and engage with them on a personal level. If you’re an e-commerce business, this starts with the user interface of your website. Design your home page so that the products most relevant to the user’s purchases or viewing history are most prominent.
It’s the little touches that count. Whenever you reach out to a customer or prospect, address them by name. Consider sending emails wishing them well on their birthday or other special events. If it’s feasible, you could also include a handwritten thank-you note with every purchase they make.
Some businesses hesitate to share too much insider information with their clients, fearful that it will only make them more discerning and drive business away. But studies show that educating customers actually makes them trust you more, and more trust means more retention. Plus, educating people gives you an opportunity to demonstrate your knowledge and build authority.
If you haven’t already, start up a blog and write posts that detail the ins and outs of your industry. Alternatively, you could give a webinar, record a podcast, or start up a YouTube channel where you provide helpful information.
Being a guest speaker at conferences allows you to engage potential customers and colleagues face-to-face in an educational context. Try handing out custom binders emblazoned with your company’s branding. Not only does this enhance your presentation with additional materials, it gives audience members a lasting reminder of your business that they can take home with them.
Set realistic expectations
All businesses want to be able to provide their customers with everything they want and more. But promising more than you can deliver is a big mistake; it might close the sale, but it’s horrible for customer retention.
Instead, the trick is to make a realistic promise and then overdeliver on it. Don’t sell yourself short—just be honest about what customers can reasonably expect, and then do whatever you can to exceed those expectations. Above all us, maintain clear and constant communication with your customer.
Few businesses have a customer base that behaves exactly the same as any another, so leveraging feedback and understanding the unique behaviors and preferences of your customers is one of the best ways to ensure that you retain them.
Following up with customers after they make a purchase is a great place to start. Ask them for honest feedback; this is best done over the phone because it helps to establish a more personal, emotional connection.
You can also gather feedback through social media or using customized surveys built into the interface of your website. Once you have that data, don’t just sit on it. Make changes to your business that improve customer satisfaction. Remember that feedback from unhappy customers is actually more valuable than that from people who love everything you’re doing—it provides more opportunities to grow.
Do you have more tips or techniques for increasing customer retention? Share them in the comments below!