Updated: Feb 14, 2020
Your existing customers are anyhow yours. So, you may feel that there’s little to bother about them.
Well, you may regret it when the existing customers start leaving.
Believe me, some staggering stats about customer retention will leave you shell-shocked.
What is Customer Retention and Why Is It Important?
It’s great that you acquire new customers. Your customer resource management (CRM) is blowing up. But, in case, if they replace your old customers whom you ignored, then it’s going to incur a huge loss in terms of revenue and time.
With that in context, what if I say that it costs about 5 to 25 times more to acquire new customers than you spend on keeping your existing customers?
The loyalty of existing customers can do wonders because they are 50% likely to move along with you.
Hold the trust of existing customers and the next thing you may notice is, they will turn out as mini ‘brand ambassadors’ of your company. They won’t hesitate to recommend your product to others.
But, does it happen with ease? Certainly not. But it ain’t effortless either. All you’ve got to do is follow simple yet standout steps to enhance your customer retention.
Check out various techniques that will make you aware of customer retention.
Techniques To Scale-up Customer Retention
The customer retention process ain’t a herculean task. But unfortunately, most companies don’t really care much about it.
By some simple methods, you can retain customers with the greatest ease.
#1 Maintain a long-run Relationship
How can you enable the customer retention process if you don’t build a steady relationship with customers? Most companies are making this mistake of not interacting with their customers enough.
Don’t do that to customers. That makes customers feel like you’re not caring for them and their ego takes on from there, making it really worse for the company.
Be transparent and communicative to them and if the mistake happens with you, then don’t hesitate and be accountable to the entire situation and apologize for your mistake.
Keep in touch regularly with them, reminding them how desperately you honour them.
#2 Value their Opinion
No customer will feel good if he’s not valued enough. This is the reason, 59% of customers say that they leave the company due to a bad experience -- according to PWC
No matter the product quality, if you tend to play with customers’ wee bit of ego, then you are the ultimate one to suffer. You need to ensure that they experience positive customer experience throughout the purchase.
If you don’t think this of an exaggeration, just treat them like ‘VIP’!
#3 Get In-detail Feedback
Customers will be pleased if there is anyone willing to listen to them. Even if you get negative feedback, by responding to them and assuring them, it can be sorted out.
Send them an email asking them if they are fully satisfied with the product. This ensures that you really care for them a lot and thus a bond of trust can be developed.
#4 Give them Periodic Updates
How convincing it is for the customers if they feel like interacting with you more often?
It’s not a daunting task nonetheless. Just update them with your regular activities and new products so that they feel like moving with you. It’s also one way of maintaining customers under your sight.
#5 Provide Valuable Content
If customers are not aware of full details about the product you’re going to launch, then how they can be assured and aware of exact happenings?
Provide really valuable content to customers and educate them about the latest proceedings. They will prefer you whenever they need a product that belongs to your niche.
#6 Make the Execution Simple
By typing the name, if every detail appears to them on screen, then without further hassle, they can go through further proceedings.
If existing customers can go through the execution process easily, they feel effortless and thus there’s every chance that they prefer your company for further transactions.
#7 Offer Rewards
Who on earth doesn’t like discounts? Well, everyone does. This is where you can act smart. If you text them of regular discounts, then they feel really special about it.
Here, you have an added advantage. You can retain the customer as well as trust. Worthy, isn’t it?
#8 Know their Pain Points
With frequent interaction with your customers, you get to know the problems with which the customers are dealing with.
Understand their exact pain points and try to give them a solution. Prove to the customers that you are there for them. Thus, customers can even turn out loyal to your company.
#9 Use Extensive Technology
Use modern technologies like augmented intelligence (AI) which runs surveys and messages to customers thus strengthening the relationships.
AI can also evolve algorithms with vast customer data. It helps you to study 360 degree view of the customer and thus judge them whether they are fond of upsells or downsells.
Formula To Calculate Retention Rate
Down the wire, you are now aware of several techniques for customer retention. But the question that stands out was “can we measure the rate of customer retention”?
Well, definitely yes. Here, we’ve got a formula to calculate it. It acts as a benchmark for your customer retention process.
No of customers at the start of period = 200
No of customers at end of period = 225
New customers acquired during period = 37
⇒customer retention rate =[(225-37)/200]*100 = 91%
Thus, the customer retention rate(CRR) of the above example was 91%
The ideal CRR was 100%. That means you shouldn’t lose a single customer which doesn’t happen. Anyway, you need to have CRR >85%. If you can do that, your business is in flying colors.
A good marketer hunt for new customers leaving the existing ones behind. But a great marketer always looks to retain the customers. Check out who you are.
If the interactions with the customers are really doing a world of good, then there should be absolutely no question to hold back.
Treat every customer like they're special. They return your favour by being loyal.