Customer retention is more valuable than customer acquisition. Most people say it costs five times as much to earn a new customer as it does to retain an existing one. Others say that retaining customers is seven times more valuable and finally, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.
Perhaps the exact numbers may be fuzzy but he points though is that customers retention is cheaper, more profitable, and in lots of ways easier than customer acquisition.
Customer retention, or client retention, is simply the process of enticing buyers and making them buy your products or services repeatedly.
Every entrepreneur has a goal of keeping existing customers by any means possible.
The goals and methods of retaining customers vary by industry: A company that sells travel services will have different customer retention strategies from that of an eCommerce store.
However, for all sectors, the idea is to provide a level of quality and service that consistently keeps people coming back. The objective of these activities and tactics brands take to improve the customer experience is to encourage customers to repurchase while also advocating for the brand’s product or service.
Customer retention programs can take several forms, but a good way to focus and retain existing customers and constantly make them have a feeling of being appreciated is to introduce Promotions on items sold.
Let’s dive into some of the customer retention tactics that will give your customers the incentive, opportunity, and desire to come back to your store for another purchase.
- Communicate value: Customers always lookout for the cheapest prices on items but they do not gamble with quality. Keep the attention directed on why what you sell makes a difference in your customers’ lives.
- Quality Customer service: The customer service has to be top-notch for buyers to keep coming back. A first bad impression can turn customers off completely.
- Act on feedback: One thing customers do is give feedback whether they ask or not. Always make room for feedback and more importantly, act on this feedback, then let customers know how they helped.
- Make messaging personal. Customers must feel that the business experience is about them. Too much is either too general, inappropriate or what you want customers to buy. Forget it. It doesn’t work and that means it wastes time and money. To do it right takes data.
- Customize loyalty rewards. Everyone isn’t moved by a singular incentive. Give them options so the decision is theirs. The key to loyalty is recognizing customers as partners in progress.
- Have events that bring your customers together: Open days, sales events, anniversaries, etc are good days to gather customers together. This will help them feel connected to the brand and foster loyalty.
Here’s a quick rundown of the benefits you’ll see from implementing retention strategies for customers:
- A five percent increase in retention rate will increase profits by 25-95 percent, according to Harvard.
- Builds brand awareness and reputation by word-of-mouth advertising from your loyal customers.
- Gives you the opportunity to build constructive relationships with your customers.
- Allows you to identify and fix flaws by receiving feedback and listening to your customers’ needs.
- Loyal customers are more willing to try or experiment with your new products. Six times more likely, according to studies.
- Your customers are more willing to be forgiving of mistakes if they feel loyal to you, which means fewer of those fly-off-the-handle angry customers.
The big question now is that Is a retention effort worth it? “The companies that have a difficult time are the ones that don’t do a good job of retaining the customers. They are never able to dial back on customer acquisition, which makes it very hard for them to get out of that loss-making situation.” – Wharton researcher Dan McCarthy,
In summary, we can say that just as customer acquisition is habit-forming, so is customer retention.
