The difference between companies that are growing and those that are struggling to develop is related to the customer retention . The more customers you can keep and continue to sell products, services to them, the more likely you are to reach your goals. business goals .
Investment in customer acquisition far exceeds investment in loyalty. However, selling to an existing customer is 6 to 7 times cheaper and therefore much easier! So why do companies spend most of their budget on generation of new customers ?
The biggest challenge for many businesses is where to start. We share here 10 tips to help you improve your customer retention that you can use to keep your current customers happy for the long haul and increase your profits.
For people who work in sales, the number one priority is finding new ways to increase business income .
To do this, they have to sell more, which in turn means they need more customers.
Therefore, very often salespeople are so focused on acquiring new customers that they fail to respond effectively to the need to keep those who already are .
Yet we keep telling us that it is cheaper to keep existing customers than to acquire new ones.
So why bother?
Especially since we remind you of a striking fact: according to Marketing Metrics , the rate of (re)conversion of an existing customer is 60-70%, while the conversion rate of a lead to a new customer is n is only 5-20%!
Not yet convinced?
According to a study by Bain & Company , a 5% increase in customer retention can increase profits by 25-95%.
So why do we keep spending more money to get new customers?
Customer acquisition vs customer retention
The most common trap for businesses around the world is that they think that if they have a great product or service, the customer loyalty will follow naturally .
And, while it might be the case in some cases, the hard truth is that this is only a short-term strategy. An even harder truth is that sooner or later your customers can simply … leave !
Because if you stop “ note “, your customers start to have the impression that you are no longer interested in them.
So what’s the conclusion?
You have to keep trying and gain the loyalty & loyalty of a customer , permanently.
We remind you that customers appreciate feeling wanted, unique, privileged, if you never speak to them do you think they will be satisfied and pay for your service again?
Don’t know how to address your customers? Check out this post where we share 6 tips to make every customer interaction amazing .
A effective marketing strategy allows you to identify, follow and sell more to customers who are most likely to become your long-term sources of income.
In this blog post, we’ll explain why and how customer retention is essential to growing your sales, along with 10 tips to help you improve customer retention.
What are the causes of low customer retention?
Customers stop buying from a business for unique reasons of their own, however there are similarities between these reasons.
- Unfair treatment : At the top of the list, customers who feel “badly treated” by companies and who would be loyal if they had a better customer experience. Ineffective service automation, such as limited access to customer support, is also the source of customer anger and frustration.
- Even though price is the primary factor influencing the “churn rate” people are willing to stay if they are treated fairly. When another business promises a better experience at a lower price, it’s a quick win for competitors to acquire new customers.
- Human relations : When a customer has a problem, he wants to talk to a real person. Searching for answers on a website or interacting with a chatbot doesn’t meet a customer’s unique needs and makes them feel unheard and offered solutions that often don’t solve their problem.
Although it is 5-25 times more expensive for your business to attract customers than to keep an existing one, a mere 5% increase in customer retention can increase a business’s profitability by 75%!
No matter what price they paid when they signed up, if their overall customer experience lacks “incentives” or human touch, you are very likely to have a fairly low customer retention rate.
How can a CRM help you improve customer loyalty?
When it comes to customer relationship management, the secret lies in one word: relationship.
A CRM is a tool that helps you know your customers, who they are, how they were reached by your team, and how they responded. Hopefully, you keep selling them, and that’s where the successful relationship really begins.
And while CRM software can’t manage customer retention on its own, it will give you the tools you need to help you manage customer engagement activities to improve the customer experience.
The question is, what do you actually need to do to influence customer retention?
Once you start to think and put your efforts into customer retention, it is essential to examine the reasons and factors that favor repeat purchases of your product or service.
Let’s face it: customer retention strategies don’t just happen on paper! You need a wide range of data and information about your customers to be able to measure and analyze their behavior .
And for that you need a CRM system!
10 tips to improve customer retention
1. Make customer experience a strategic priority
Everything you do has an impact on the perception of your customers and on their decision whether or not to return to buy your product / service.
If you create a good, consistent and predictable experience, you have every chance to improve and build good relationships with your customers and create loyalty.
The customer experience includes all points of contact with your business, from browsing the website to the final purchase and interaction with customer service.
Thus, a great customer experience is the key to your success.
How to make the customer experience the central point that can increase the loyalty of your customers?
- Improve Customer Satisfaction : A satisfying interaction with your brand undoubtedly creates a positive impression and experience that encourages customers to keep your business.
- Convert new customers into loyal customers : When customers receive consistent service, they are delighted with the experience and develop loyalty to your brand.
- Improve customer advocacy : Happy customers not only have high long-term value, but they are also the best advocates for the brand. They share their experience with their friends to improve the credibility of the brand, also increasing your customer base for exactly 0 euros out of your pocket.
Quality customer experiences are those that create an emotional connection with customers. Companies that use emotional connections outperform their competitors by 85% in terms of sales.
They offer service with a human touch during customer interactions.
Connecting with customers starts with listening. It shows that you care about them and you will also be able to find out about their needs, difficulties and tender points.
Our recommendations :
- Always listen to your customers to discover their needs, their difficulties and their sensitive points.
- Make your customer service as human as possible, whether you do it online or in person.
- Try to establish an emotional connection with your customers in order to retain them with your business.
2. Engage the customer directly
Companies that equip their customer support team with live engagement tools, such ass as co-browsing and video chat, can provide faster solutions from the first contact. Live engagement tools reduce the number of contact points with the customer and provide effective solutions from the first contact.
Using the visual tools, you can guide them through the complex process of filling out forms, making the integration seamless, and providing a virtual experience in person.
Customer engagement tools can be one of the best customer retention strategies. Let’s see how.
- Personalize Support: Face-to-face interaction promotes personalized conversations and eliminates all fear and frustration, allowing for personal and trusted relationships with customers.
- Improve Customer Experience: With instant response, you reduce the number of customer touch points. Live sessions have a big impact on customer satisfaction. With co-navigation, you can deliver real-time interactive experiences to your customers.
Let’s take an example, Commercial Bank of Kuwait (CBK), for example, has implemented REVE Chat’s co-browsing and video chat solution . Their main goal was to increase user engagement in online banking and provide an advanced digital banking experience.
The bank has marked an increase in online engagement and reduced the number of contact points to resolve issues.
Our recommendations :
- To communicate technical concepts and the filling of complex forms, the combination of video chat and co-browsing can provide effective solutions.
- You can develop friendly communication with customers that positively impacts customer relationships and provide faster responses in real time.
3. Prevent the “risk of churn” in advance
The most obvious way to retain a customer is to prevent them from leaving. (Thanks captain obvious)
If you are really careful, you can still detect the signals announcing an imminent departure of your client .
To capture these “warning” signals , you need to identify key variables in customer behavior, such as purchasing habits, product usage, and history of customer service requests. Then you will need to analyze these signals and take action to stop your customers before they give up.
All of this is possible via a CRM.
Example : Let’s say you want to know how many of your customers haven’t bought anything in the past 6 months, which could be a sign that they are considering quitting your services and moving their money to your competition.
Start by creating a list of all your customers, then create a list of all the sales made in the past six months using your CRM software. By comparing these lists, you get a list of customers who haven’t purchased from you for more than six months.
You can now send follow-up emails to those customers and find out the reasons why they don’t buy, and prevent them from leaving your business.
Twilead is an all-in-one tool allowing you to compile lists with precise variables of all your prospects and customers. You can process this data and prepare intelligent follow-up email sequences to your customers to prevent an increase in your churn rate.
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4. Set up a customer feedback strategy
As Bill Gates said, “Your most unhappy customers are your greatest source of learning.”
And the easiest way to find out whether or not your customers are satisfied with your products and services is to have a regular return from the latter. Feedback from your customers is vital to any business and is an important factor that determines the growth of your business.
Complaints or feedback from customers give customers’ perception of your entire business. They also give a clearer view of your performance. To collect feedback, you should ask customers to give their opinion on the product, service, or overall experience.
The best time to seek feedback from customers is right after a conversation with customer service. Collecting feedback becomes effective when you analyze and act on it.
You can also test the desires, problems that your customers encounter via the survey system in order to test a new concept complementary to your activity or the improvement of your existing product / service. Do not forget that these are your paying customers! Simply ask their opinion so that you know what they want.
Our recommendations :
- Categorize the comments collected from customers to send them to the relevant departments. Divide them into categories that deserve their own branding and attention into subcategories.
- Use all the results establish an action plan indicating how you plan to respond to each of the issues raised.
- Position your Customer Success team to ask return questions at the right time, choose the right channel for requesting customer feedback, tailor the feedback questionnaire, direct return questions to the right team.
5. Target a portion of your customers with special offers
The more you know about your clients, the better you can tailor your approach to each individual.
Via your CRM, you can visualize a customer’s purchase history, which allows you to determine what type of offer will be most attractive to each individual and increase its relevance, which will help your brand to stay present in the minds of your customers.
What you need now is identify ways to rekindle their interest and convert it into a real purchase! You can do this by offering them special discounts for example.
Example : Suppose you want to follow up with customers who have shown an active interest in your product, but haven’t purchased anything for some time.
Create a list of all the customers who haven’t bought anything for a while on your CRM and compare it to a list of all the contacts who have subscribed to your newsletter for example. The result is a list of contacts who are actively interested in your product, but have not shown signs of life for some time.
Send them a special offer or discount on a new product and let them feel that you care about them and haven’t forgotten them.
6. Reward your key customer accounts
Once again, through your CRM, you can find out which are your most profitable accounts. These are the customers you really don’t want to part with, your key customer accounts .
Knowing who brings you the most income allows you to allocate your time and resources efficiently, as well as increase your chances of cross-selling or upselling.
Example : Let’s say you have a number of bonuses to hand out. Use them to reward your key customer accounts to increase their loyalty.
It’s easy: just create a list of these types of customers in your CRM software. Now you can start following them and educating them about rewards and incentives so that they feel special and continue to be your most profitable customers. If you considerdisregard the Pareto 80/20 rule, this investment can only be profitable!
7. Create a community to improve your customer relationships
People appreciate the feeling of belonging to a community or a group. As a business, you can complement these positive feelings by managing the community, or by creating a user community that benefits your customers.
Building a community will give your customers the opportunity to discuss important topics and ask questions about your products and services.
When customers feel connected to your brand, they tend to show it by repurchasing and word of mouth, which helps you build and grow a loyal customer base.
Building a community can be a great customer retention solution in the following ways:
- You can establish a close relationship with your loyal customers thus giving them a place to connect with the brand and with each other.
- It acts as a databasewhere your followers can share tips and tricks for optimizing the product.
Regardless of how your community is used, as a resource for sharing useful information or as a way for users to submit customer reviews, fostering a space where customers can interact with each other and with your team. adds value to your customers’ experience and continues to delight them.
Our recommendations :
- Have a community is an essential tool for customer education but it is important to moderate conversations to avoid irrelevant discussions that would damage your brand.
- The community is developing a customers’ sense of belonging to your brand . They decide to stay true to your brand for life.
8. Track your customer retention KPIs
In order to optimize your efforts in customer retention strategies, you must understand how to track and measure certain retention KPIs. When you know how to calculate key metrics, you can start leveraging them for lasting, profitable results.
Here are the top retention metrics that have a huge impact on revenue and growth.
- Customer Churn Rate (CCR) : By understanding why customers leave, when they leave and how they leave, you are able to optimize the customer experience for those who are still subscribed to stay loyal to you.
- Customer Lifetime Value (CLTV) : This metric shows the value of each customer and the revenue you can generate if the customers are retained and continue to pay.
- Customer Acquisition Cost (CAC) : CAC is a fundamental metric that helps you understand your target market and the ROI of your existing acquisition strategies and channels.
- Net Promoter Score (NPS) : A high NPS does not automatically guarantee customer retention and growth. But when it is analyzed together with the growth rate of turnover and the attrition rate of customers, you can predict possible growth through retention and referrals.
Our recommendations :
- You need to regularly measure your customer loyalty metrics to understand which loyalty techniques are working well and which ones need to be changed.
- When you know how your customers like to be served, develop engagement plans in a similar way to make your service efficient and help keep customers coming back.
To go further, discover the 10 essential KPIs to measure customer loyalty .
9. Stay available to improve your customer retention
You can proactively help your website visitors and customers by using all customer data that you have. Analyzing the data will help you understand the needs of your customers and support them accordingly to improve their retention.
For example, if you are a SaaS company and you know that customers are constantly stuck at some point . You can create triggers that will automatically send them messages to help them resolve the issue they are facing.
Once again, hence the importance of having a complete tool that can act as a CRM, a data analysis tool and sending triggers to “activate” your visitors.
Our recommendations :
- You will integrate this feedback into the product to ensure that your customers don’t get stuck at this particular stage.
- SaaS is different because almost all interactions are digital and measurable, but the principles of empathizing with your customers’ needs remain the same, no matter what industry you are in.
10. Engage your employees in this process
As part of their customer loyalty programs, businesses need to go beyond products and prices. What they need to do is take advantage of their most underutilized assets, namely their staff . When employees are engaged they provide customers with personal experiences with their own emotions, these canvass tend to increase customer loyalty as well as customer engagement with your brand.
According to a Gallup study on employee engagement, the U.S. workforce has only 30% of employees engaged in their jobs, and active disengagement costs the U.S. economy between $ 450 billion and $ 550 billion per year. year.
Our recommendations :
- When you value your employees, they are ready to go above and beyond for you and provide the best customer service experience.
- It’s important to make employee training an integral part of your corporate culture to educate them about your business vision and customer engagement strategies.
With well-designed customer retention strategies, you can understand your customers’ needs and improve their loyalty. You must provide extraordinary customer service and develop a personalized customer relationship with each of them.
Make your customers feel like they are part of your business by taking their opinions into account. Implement their suggestions and recognize them to get the customer success they deserve.
Think about what customer retention strategies do you think work best for your business?
Your existing customers give you a great chance to increase your profits because they are more likely to buy from you than prospects.
And to do that, you need a tool to nurture your relationships: CRM.
With the help of CRM software, you can collect and manage information about your customers as well as manage activities related to customer engagement.
Use the data provided by the CRM software not only to retain your customers, but also to make them happy and increase your profits, all without the added expense of acquiring new customers.
The more customers you retain, the higher your profits will be. Ask for a personalized demonstration free to find out how you can best use our CRM to retain your customers.