Customer acquisition costs are much higher than customer retention. For acquiring every new customer, businesses need to develop a strong pitch, build rapport, and convert a prospect. Several external factors could influence a prospect’s decision making in this process. Contrary to this, holding onto existing customers is within a company’s control and helps maximise value earned by retaining customers throughout their product lifecycle.
Retained customers often become brand evangelists and multiply the value by bringing in more business through word-of-mouth referrals and recommendations. Studies suggest that a 5% growth in customer retention can push profits from 25% to 95%. However, despite that, 61% of retail companies find it hard to retain customers.
Here are some sure-shot customer retention strategies businesses can adopt to build a loyal customer base:
Be honest & build trust
Edelman Trust Barometer Report suggests that 70% of consumers choose to spend money on brands they trust. Building trust with prospective and existing clients is the No.1 rule towards building an engaged and loyal customer base.
Some ways businesses can build trust are:
- Ensuring transparent communications across all customer touchpoints
- Offering top-notch products and services
- Streamlining internal and external operations to offer the best customer experience
- Continuously seek feedback and act on it
In the end, customers trust brands that maintain clear communication, be accessible and stand true to their claims.
Additional Read – Best Customer Retention Strategies for SMEs
Apologise without delay
Even though the focal point should be to eliminate mistakes, some are inevitable. But the reality is that 80% of customers choose to move their business elsewhere after a poor experience.
Discontented customers move their loyalties when brands repeat or overlook mistakes or leave issues unaddressed for too long. The ideal way to navigate such circumstances is to apologise immediately and do right by the customer in whatever means available to the business.
When customers understand that the business is forthcoming enough to accept and correct their mistakes, they prefer to give the brand another chance.
Take support from Reviews
The best form of advertising is the one the customer initiates by their own accord. Delighted customers would never hesitate to market their favourite brand. But displeased customers are equally driven to voice their frustration and share negative feedback. With digitisation, reviews are available for brands across industries, and these testimonials speak volumes about a company and its service.
To retain customers in the long run, brands must feel the pulse of their customer reviews and feedback and increase the ratio of positive to negative testimonials. Social proof from real users is an effective tool to retain and increase the turnover contribution from repeat customers.
Encourage two-way communications
Gone are the days of one-way communications where brands advertise, and prospects consume and convert into loyal customers. Today, social media platforms encourage direct interactions between brands and their prospects, which brands could effectively engage and retain customers.
Engaging customers in conversations, seeking continuous feedback, and improving on customer inputs can help enhance customer retention. Businesses can understand how they can optimise their operations by encouraging questions from customers and working towards delighting them.
Additional Read – Five Ways to Grow Your Business
Customer Retention accelerates business growth
Customer retention is a crucial metric for businesses to survive in today’s competitive markets. Invest in the right CRM tools, train employees to keep a pulse on customer experience and sentiments, and actively evolve communications across customer touchpoints to consistently offer customers the best product or service.
Customer retention is the key to accelerating business growth. In the words of Kevin Stirtz, a customer service expert, “Every contact we have with a customer influences whether or not they’ll come back. We have to be great every time or we’ll lose them.”
If you need funds to invest in your customer retention strategies, reach out to Tata Capital term loan and avail of tailormade short-term or long-term financing solutions to suit your unique business requirements.