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Every business, small or big, strives to retain a healthy customer base. Retaining customers doesn’t just bring revenue, it also boosts loyalty and attracts new customers to the business. Statistics show that a 5% increase in customer retention can boost profits by up to 95%.
Further, retaining customers is easier and more cost-effective compared to acquiring new ones. In fact, it’s 6 to 7 times more expensive to acquire a new customer than to retain them. Also, loyal customers spend ten times more than new customers, thus accounting for 80% of the company revenue.
All this clearly shows how important it is for businesses to focus on retention. Yet, a whopping 44% of businesses admit that they have a greater focus on customer acquisition. Customer retention is critical because it measures business success and how satisfied its existing customers are. So, without further ado, let’s see how we can improve customer retention.
1. Improve KPIs around customer service
Existing customers are looking for value, and that can only be delivered through awesome customer experiences and service. The Customer Experience Trends Report 2020 confirms that customer service is among the top attributes that make customers feel loyal to a brand. Hence, understanding and working on the link between customer loyalty and how you serve your customers through their journey with you is important. Make sure you monitor the key metrics for customer service.
First response time or FRT
Customers are looking for speedy resolution of issues. The average FRT is the time between the first contact made by the customer and the response from the service team (even if the problem isn’t solved). A high FRT means that your customer service team is taking longer to acknowledge a problem. This negatively impacts trust and CX.
Customer retention rate or CRR
Kissmetrics confirms that the global average cost of losing one customer is $243. But it’s not just about the cost. Losing a customer means a negative impact on trust. CRR is the ability of a business to retain a paying customer over a set period. Your CRR score can only go up if you focus on improving your CX and service.
Customer satisfaction score or CSAT
CSAT is the best metric if you want to gauge whether your customer service lives up to your client’s expectations. It is usually collected through channels like live chat or through an online survey. A higher CSAT relates to better customer satisfaction.
Net Promoter Score or NPS
NPS measures how likely your loyal customers are to recommend you in their social circle. So, if a customer gives you a score of 9, it means there’s a good chance they’ll refer you to others. On the other hand, if they give you a score of 7 or 8 (neutral response), they are satisfied but vulnerable to being converted to a competitor brand when they experience the slightest friction.
Customer effort score or CES
CES uses a survey to measure how easy it is for customers to do business with you. Simply put, it measures the effort taken by customers to complete a transaction, report an issue, get it resolved, or interact with a service representative. Customers are usually asked to rate their experience on a scale of 1-5, 5 being the highest.
2. Utilize customer feedback surveys
All customers have certain set expectations from brands they associate with. But how can marketers know what they expect? Surveys!
Conducting surveys at various points along the buyer’s journey can help you determine whether the customer is satisfied or dissatisfied with the brand experience. Customer feedback surveys can help in with the following:
- Identifying defects in a product or service
- Identifying the dissatisfied customers
- Planning customer retention strategies
- Planning process improvement
Using a survey maker this is easy to execute. Here’s how businesses can leverage customer feedback as collected in surveys.
Listen to unhappy customers
Unhappy customers tend to offer in-depth feedback for a product or service. Though they seem to be associated with negative experiences, they can add a lot of value to your product or service. Make sure you listen to what they have to say about your service.
Use the insights derived from surveys
Your job isn’t over after they’ve done the survey. It’s important to use this feedback to improve your services. This will not just improve your customer experience but also make customers feel heard. For instance, CSAT scores can help teams understand customer sentiment at specific points in the customer journey. This can be used to identify key areas for improvement. Similarly, product surveys can point to specific features that customers enjoy or barriers to long-term customer loyalty.
3. Engage and re-engage through automation
Automation doesn’t just help engage customers and improve customer service, it also reduces the cost of marketing. Marketing automation tools can prove to be great assets when it comes to engaging loyal customers, tracking each interaction, increasing sales, and saving time.
So, if you need to nurture your leads through email, small businesses can engage their subscribers using a comprehensive CRM system such as vcita. This business management app can be integrated into your website, allowing visitors to submit their contact details for a free consultation, attend an event, and so on.
Once a lead has signed up for a consultation on the app, you can set up a highly targeted email drip that will follow up with them. Thus, combining automation and personalization can help you deliver relevant messages, thereby improving your CX and retention rate. That way, you’ll never miss an opportunity to engage your leads.
4. Conduct live group sessions with customers
Live group sessions are a great opportunity to gain valuable insights related to your target audience and the market. Historically, these sessions were always conducted in person. However, in the post-pandemic era, platforms like Facebook, Google Meet, Zoom, and others have proven to be quite effective. Such sessions allow marketers to ask for feedback about their products and services in real time. Follow these quick tips when conducting a live group session.
- Determine the purpose of the group discussion.
- Prepare your questions in advance. These should be congruent with your goals.
- The moderator hired should be able to ask relevant questions and read verbal and nonverbal cues.
5. Don’t forget post-sales service
No one wants to stay loyal to brands that ignore or poorly engage customers after a sale. A PwC survey report showed that 1 in 3 customers will leave the brand they love after just one poor experience. What’s more, 92% will abandon the brand completely after two or three negative experiences.
Hence, it’s critical to engage customers through their journey with you. That’s the best way to stay in good favor with your customers. Offering a great post-sales service is a terrific way to cement a long-term relationship with customers. This is especially relevant for small businesses that cannot afford to invest in elaborate advertising campaigns.
For instance, in this digital era, brands are constantly investing their time and resources in acquiring new customers. But the last thing any brand wants is complaints from existing customers. This can ruin your reputation and dissuade new customers from trying your brand. Therefore, it’s advisable to attend to the concerns of your customers in a timely manner. Further, engage your loyal customers by offering them thoughtful discounts through a promo code or a coupon.
The best customers aren’t the ones who try your product or service once or twice. Every business needs customers who’ll stay loyal to them and recommend them to others in their network. But customers will only stay with you if they continue to see value in your offerings. That’s what customer retention is all about!
Simple things like listening to your customers and optimizing customer experience can go a long way in strengthening your relationships with them. Use the tactics shared in this post to retain loyal customers and take your business revenue to the next level.