You’ve probably heard rumors about the following customer retention statistics: Specifically, it costs much more to acquire new clients than it does to maintain the loyalty of current ones.
It is reasonable. It is simple to maintain a customer’s loyalty through your marketing efforts when they already know, love, and use your brand.
However, you spend money on things like advertising, direct mail, and email campaigns when you’re looking for new clients. Not to mention the time it took you (or a member of your team) to write, develop, and produce multiple pieces of content marketing.
nonetheless, these are the figures:
- Only 18% of companies prioritize customer retention.
- The lifetime worth of a customer can only be precisely measured by 42% of businesses.
- Selling to a new consumer only has a 5 to 20 percent chance of happening.
So, if your company isn’t concentrating on customer retention, it might as well be.
The formula for customer retention
Every company should be aware of where its retention rates start. A company cannot set goals to increase sales and expand its customer base without this knowledge.
Fortunately, just like with other marketing metrics, there is a formula you can use to determine how to keep customers happy:
(Number of Customers at the End of Period – Number of Customers Acquired During Period) / Number of Customers at the Beginning of Period] x 100
Think about starting the year with 10 clients. Three new customers come on board in the first quarter, but only two of them stay (also called customer churn rate).
[ (11 – 3) / 10 ) ] 80 percent retention divided by 100
After you have established your retention rate, consider what the data means for your company.
. Have you had a lot of repeat business?
. Do you have any idea why that is, or can you simply speculate?
. Exist any patterns in the consumers that leave that can help you better your attempts to keep them?
Consider the possibility that a 5 percent boost in your retention rates could result in a 25 to 95 percent rise in your overall profitability.
Although it might seem like simple knowledge, many firms overlook customer retention. Instead, they erroneously believe that as long as they provide a high-quality good or service, clients would keep coming back to them.
This might be the case for some clients, but some want a bit more care. Businesses must keep in mind that, in every market, a rival is constantly looking for opportunities to steal your clients.
Industries having the highest rates of turnover in 2020 included:
. 25 percent for cable
. 25% in finances or credit
. 24 percent for general retail
. Retailing online: 22%
. Telephone/wireless: 21%
. Transportation: 18%
. Electronics from Big Box stores: 11%
increasing client retention
Each client will have different needs. It’s accurate to say that every customer of your product or service shares a similar problem. However, knowing what each customer’s pain issue was will aid you in your efforts to retain customers.
But you might be asking exactly HOW to keep consumers.
Make calls to them?
create a program for loyalty?
All of the aforementioned is the answer! or none of the aforementioned options. What suits your company, your employees, and your financial and time constraints?
Be innovative in your efforts to keep customers! Here are a few suggestions to get you going.
- Create connections
Is there a repeat customer that comes to you every week or month to make a purchase? If so, what is your knowledge of him or her? Learning minor facts about your clients (and remembering them) indicates that you care, from name to birthday to name of spouse or pet. Send them a straightforward note saying “thanks for your business” or something special on their next birthday.
- Establish a rewards scheme
These days, does it feel like every company has one? Because the majority do! Why not, then? The availability of technology has made it simpler than ever to create a straightforward but efficient loyalty program. A loyalty program offers benefits beyond simply making your customers happy, from a straightforward birthday reward to cash back for purchases. Additionally, it can help your business achieve a number of objectives including boosting website traffic or promoting more transactions.
- Participate in social media
For your business, a small number of social media platforms are sufficient. Nevertheless, this method of promotion is here to stay, like it or not. And it’s a fantastic approach to keep clients interested in your business while also keeping abreast of their changing wants.
- Make your communications more tailored
By segmenting your contact lists, you may increase retention while also spending less on sales and marketing in general. After all, individuals are more likely to pay attention if you offer a message that is specifically tailored to them. The appropriate content for every customer group won’t be available right away, and as a customer, each group’s preferences for content are likely to vary. However, addressing a customer by name, varying the subject line, and even sharing anecdotes with various consumer groups will all have a significant influence.
- Request criticism
Feedback can occasionally be a bitter pill to swallow. However, by asking your current clients to identify your strong points and areas for development, you are demonstrating to them that you value their feedback. Additionally, that you wish to improve for them. Both actions serve to show self-awareness and foster commitment.
- Help a Cause You Believe In
More than at any other period in history, people are looking for points of agreement today. To increase customer retention, consider how you may help your current clients’ favorite causes. Will they contribute to fostering a better world? Describe how their purchases help family farmers or lessen their total carbon footprint. They advocate the well-being of animals. Create a donation drive for your neighborhood humane organization or offer to match donations made over some time each year dollar for dollar.
- Make a call to them.
How often has a business that you’ve done business with contacted to see how things were going? It’s uncommon to call your customers just to say hello and check on how they’re doing, which is why this method of client retention is so successful. Never should the goal of these calls be to close a deal. However, you may always ask for recommendations if you wish to end with an appeal.
Keep track of your attempts to keep customers.
You could be asking yourself another question now that you are aware of what client retention is and how to get started.
How can I keep track of all of these efforts to retain customers?
Use a Customer Relationship Management (CRM) software system. That’s all there is to it.
You can manage and arrange your current customers more efficiently with a CRM software package than you can by memory alone. Keep a record of their entire name, birthday, child’s name, a preferred destination for vacations, and much more.
A CRM can be used to keep track of client information related to your company. By doing this, you facilitate analysis and the discovery of fresh discoveries like:
. How frequently do you contact your leads?
. How much money do they typically spend on your goods or services
. When are purchases made the most frequently?
. Your most successful or well-liked campaign
Without a question, maintaining customers requires work. However, keeping your current consumers is much easier than trying to attract new ones. Additionally, Data Axle Genie can support you in your efforts to retain customers. In reality, we provide a range of turnkey marketing solutions that are intended to keep you top of mind with your most devoted clients.