The following is a guest blog post by Sam Makad.
If you want your business to be successful in the long run, it pays to give priority to customer retention. Landing a customer who will pay for life is like hitting the jackpot. After all, it takes five times more effort to land a new customer than to retain an old one.
But loyal customers don’t just appear out of thin air. It takes a lot of time and effort to do so. So, let’s take a look at the best customer retention strategies that can help you hold on to your most-prized assets.
1. Keep an Eye on the Churn Rate
Churn rate refers to the number of customers that leave your company over a given period. But that does not mean that it happens out of the blue. If you pay close attention, it is very much possible to detect churn in advance. You will then be able to take preventive measures against it. To be able to do so, keep an eye out for the following customer variables:
- Purchase patterns of customers over a certain period.
- Relevant metrics related to product usage.
- History of customer service inquiries of the products.
Some common signals of churn include:
- Customers asking for or expecting features/services that you cannot provide.
- There is an evident lack of trust between the customer and your company.
- Their purchase or engagement pattern depicts a constant drop.
2. Boost Your Value Proposition
Every company has a predefined value proposition that they provide to their customers. But that does not mean that it is always constant. You can always boost the value you provide by pairing your products/services with offers and discounts that your customers love.
But the worst thing that you can do here is to create offers based on a hunch and not leveraging the customer data you have. Here’s what you can do instead:
- If you have not been using CRM software, implement it immediately.
- Once you have enough data to fall back on, start digging through customer history.
- Unearth crucial pointers about customer buying patterns, possibly personalized data about every individual.
- Leverage the data in your communication and marketing strategies to struck all the right chords
3. Segregate VIPs and Reward Them
Not knowing who your most valuable customers are is like shooting yourself in the foot. You need to be constantly aware of the largest accounts and have a separate pool of customers who pay the most.
How can this be done? We are back to square one; through a CRM software or Customer Success platform. Analyze the purchase patterns of your existing customers and figure out who the VIPs are. Once you know your most valuable assets, you are aware of how to allocate your resources in the most optimum manner. By the way, your customers are most likely to follow the Pareto Principle which states that about 80% of your revenues come from 20% of your customers.
An obvious benefit of this knowledge? A lot of upselling and cross-selling opportunities!
4. Invest in Customer Service
Customer service is the backbone of your any customer retention strategy. It is even being dubbed as the new marketing. And it makes perfect sense. Your customers are bound to encounter a hiccup or two in their buying journey. What matters is how quickly and smoothly are they able to get past them with minimal intervention from your end.
And when they need intervention from your end, do you have all the right tools to address them? New-age customer service concepts such as co-browsing and AI-powered live chat that companies like Acquire are actively pioneering in go a long way to assert your expertise. They tell your customers that you care about their woes as much as they do and that you are willing to walk the extra mile to save the day!
5. Create a Consistent Customer Experience
An immediate benefit of consistency is that customers can always pick out your brand from the platter of digital information that is handed over to them every day. With that being said, consistency is also key to developing a mutually trusting relationship with your customers. Here’s how:
- Being consistent in your content and offerings breeds expectations.
- When customers expect and you deliver, they are delighted.
- Consistency converts delighted customers into a loyal one.
- And loyalty results in a trusting co-dependent relationship.
So, which channels do you need to synchronise? These include website assets, social media channels, customer service operations, and the like. Basically, anything and everything that makes it possible for your customer to reach out to you for consistent support quality.
6. Use the Element of Reciprocity
It goes without saying that acts of kindness can boost loyalty amongst your customers. They tend to create a certain level of obligation in the person who tries, almost instinctively, to return the favor. There are two basic ways in which you can leverage the element of surprise:
- Surprise Reciprocity: A surprise gift or a gesture that is meaningful and provides value. For instance, this can be free merchandise or tickets to an event.
- Trumpeted Reciprocity: Doing or delivering something that may not be deemed extraordinary, but also revealing the significant efforts taken to do so. An example of this can be early bird access to a product or feature that is not yet launched.
What are your go-to strategies for improving your customer retention rate?
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