Is your business spending time, money and resources continually chasing new customers? How much emphasis is being placed on customer retention strategies to cultivate a loyal customer base?
This article will highlight why customer retention is so important, along with practical and actionable strategies you can implement to enhance customer loyalty and the overall customer experience (CX).
Why customer retention is so vital
It actually takes a lot more time and resources to attract a new customer than it does to retain an existing one. A new customer might buy from you once, never to return. While new customer acquisition is important, constantly trying to acquire them can prove costly.
According to recent research by Bain & Company, just a 5% increase in customer retention can result in a 95% profit boost. With attractive figures like this, it’s clear to see that focusing on repeat customers is healthy for business.
How customer expectations have changed
Customer expectations have experienced a significant shift in recent times, largely due to the rise of digital technology and changing social dynamics. This has also resulted in a change in consumer habits, most notably the ‘I want it now’ mentality.
These days, online customers expect a seamless omnichannel experience when purchasing products or services, contacting customer support, finding information and more. They use smartphones, tablets and laptops to access a variety of channels to make their decisions and purchases.
Personalised experiences and leveraging data
It’s more important than ever to treat customers as people in this digital age and not just as statistics. Therefore, personalised experiences are essential for improving retention rates. Delivering the right message at the right time adds a personal touch and data helps achieve this.
A customer feedback survey is one method of gathering relevant and personalised data. Listening to what people say on your social media channels is another. Customer support is a channel that provides valuable information.
Once you’ve gathered data on your customers, you can then target them with personalised messages, emails, product offerings and more. The culmination is a personalised shopping experience that breeds customer loyalty.
Enhance the customer experience (CX)
A positive customer experience determines the customer lifetime value. This results in customer loyalty, repeat business and positive recommendations and referrals. It also sets the stage for business growth. Let’s delve into some strategies to enhance CX.
Become difficult to replace
Harvest ways to be unique and hard to replace. Achieve this by fostering a positive CX on every level, over-delivering on expectations, providing exceptional customer service, adding value wherever possible and personalising CX.
Provide an omnichannel experience
Omnichannel means customers will receive the same experience no matter which channel they choose to interact with your business. This includes interacting on your social channels, your website, customer service and support, in-store, on the phone or anywhere else. Consistency is the key to providing a positive CX across the board.
Create customer profiles
Understanding your customers is vital for a positive experience. Creating customer profiles or personas will help. As you grow your customer profiles, everyone in your company will understand the customer’s specific needs, wants and pain points.
Engage customers and create meaningful interaction
Keep customers engaged with your brand by cultivating meaningful interactions. Let’s look at some strategies.
Voice of the customer
VoC embraces customer feedback on product improvement, expectations, needs, understanding and so on. Encourage meaningful interaction. Create feedback programs to gain a deeper understanding of your customers.
AI and chatbots
While AI and chatbots can have their downsides, when used creatively and effectively, they can actually enhance the customer experience. You can use chatbots to immediately connect the customer with the right person and employ AI to predict a customer’s needs before they even state them.
Your social media channels provide the perfect platform for interacting and engaging with customers in a meaningful way. Include dedicated customer service channels, run competitions, offer customer feedback surveys and maintain rapid response times.
Create a brand community
The essence of a brand community is a place or platform where people who have an emotional connection with your brand can connect with other like-minded people, as well as your company.
One of the main benefits of an active brand community is your ability to directly connect and communicate with your loyal client base. A brand community also offers a platform for you to showcase any causes you’re involved in. You can demonstrate how your organisation is playing a proactive role in the community, saving the planet or any other cause your brand is passionate about.
This makes customers feel good about being associated with you. Feeling more connected with your brand breeds loyalty and improves retention rates.
Listen to customer feedback
We’ve discussed customer feedback throughout this article, but it’s only useful if you listen to it and act on it. Customer feedback provides incredibly valuable data. Use it to understand what you’re doing right and to implement positive change in areas that are lacking.
Loyalty and rewards programs
These programs have been a staple method for cultivating customer retention for many years now. The reason why they work and continue to work is because most customers will respond favourably to incentives and free gifts. In fact, loyalty programs are a proven way to retain customers.
There is the classic rewards/loyalty card where the customer receives a freebie after a certain number of purchases. Supermarkets use the loyalty points system where customers accumulate points for every purchase and can later spend those points on products in the store or use them to receive a discount.
Visualise ways you can offer incentives to your customer base, and keep your rewards and loyalty programs engaging and interesting.
Consistent, honest and transparent communication
Reviews of your brand spread rapidly these days, so you’ll want feedback to be positive. Accomplish this by building trust. Consistent, honest and transparent communication with customers helps establish trust in your brand. Keep communication etiquette consistent across all channels and respond quickly to questions and concerns. Always reply with truthful and open answers. Any hint of deception is the quickest way to lose credibility.
The importance of well-trained staff
Your staff represent your brand, so it’s vital that they are well-trained and fully comprehend what you expect of them and what your vision is for the company. When your staff know exactly what you want, they’ll be able to deliver on customer expectations and represent your brand effectively.
When company leaders, management and staff are all in alignment when it comes to company goals and the customer experience, a consistent and positive CX will be the end result.
Humanise digital experiences
The goal of digital technology should be to enhance human interaction rather than replace it entirely. Throughout the CX journey, customers will encounter a blend of self-service and human interaction. Therefore, it’s imperative to strike a balance between the two with the right tactics.
Learn how to do this by downloading our FREE eBook today: Humanising Digital Experiences: Enhancing Self-Service CX.