In our previous blog, we identified two key ways to build your business through customer relationships. A good retention strategy is absolutely essential to sustaining your customer base in the long term.
Why does customer retention matter so much? Customers who are retained show a trust in your business and continue to come back to it. Those who return are proof that a business has provided services which are valued and trusted, and are necessary in order for the company to thrive.
At first, customer acquisition seems like the strategy worth spending more time and money on. It is temporarily satisfying to bring in lots of new business, but can be financially hazardous if you don’t have a plan for retention.
One-time customers not only do very little for the long-term growth of your business, they actually drain from you if you only invest in their short-term business, instead of putting your focus on customers who will return.
In the end, your retention strategy will make or break the business.
Successful retention focuses on understanding customer needs along with working to develop a relationship through meeting those needs. It is therefore critical to measure any changes, including drops, in retention of business.
Consider customer churn rate. Churn rate is designed to measure the percentage of customers who leave set relationships with companies during a given time period. To calculate it, the total number of customers who left your company during a set period is divided by the total customers remaining at the beginning of the period.
Churn rate is not intended to use as a given number. It exists to analyze a set period of time and look for ways to improve. Knowing why some customers are lost and never return is necessary to understand how to better retain customers, and part of being willing to adjust your customer service.
Building and Keeping Relationships
It’s necessary for all businesses and owners to value a customer that has previously purchased an item as a potential brand ambassador. If that person has experienced quality customer service and quality, they are far more likely to buy and to recommend if the experience was positive.
If there was an issue, people generally want to know that they matter and that your company truly cares about how they were treated. It is too easy for companies to be placed on a list that a customer will never buy from again.
The Bottom Line: 100 customers can have an excellent experience and never tell another person about it, but one bad customer experience is likely to be shared multiple times!
It’s easy to assume that those who leave reviews are more likely to only report bad experiences. Be the company that makes them want to tell others about you for good reasons. Monitor your brand’s current perception in reviews and overall performance, and strive to be the company that so clearly stands apart, your customer can’t wait to leave a glowing review!
Tips for superior customer service
Successful customer retention can help you make acquisitions later, as it helps to prove that you care about maintaining relationships and strengthening connections.
As long as you keep high standards for providing good, reliable customer service, it is far easier to sell to a current customer than to a new one. There is much to be said for the strides a business can make by relying on the strength of its engagement with customers and of a loyal customer base.
Look for ways to grow and prevent further losses. Promote customer happiness and relationships.
Create a good system of customer service. Provide customers with ways to reach back and voice their needs. Have enough representatives available to answer calls. Don’t send calls to voicemail.
Prioritize front-end staff who are knowledgeable and can answer or easily look up answers to questions, in order to minimize transferring calls.
Don’t lose contact after investing in and building the initial customer relationship. Work to continue to develop and reward the relationship.
Have a frequent communications calendar set in place.Regular thank you’s, letters, follow-ups, special offers, and more continue the chain of service. Maintain primarily through email communications or through social media.
Why Retention Pays Off
Companies focus so much on getting new customers that some often forget about the customers they already have and what current customers think and need. Remember that your retention strategy is a key factor in keeping and building these relationships, and seek different ways to develop them.
Learn how to bring back customers and reactivate your base. One of the easiest ways to jump-start your revenue is to rejuvenate your relationship with customers who already know you and your product. Show you will overcome any objections and demonstrate that you still value them, and the rewards are often swift and high.
What have you learned about customer retention? Share your journey or tips for better customer service here with us!