If you have a solid customer retention strategy, you’ll have, by default, higher customer satisfaction levels, meaning increased revenue growth for your business. Happy customers have good reason to do business with you again. Retain them and you make more money in the long run.
If you’re losing customers, you’re losing money. The cost of replacing lost customers with new ones is alarmingly high. The degree varies between five and 25 times more than simply retaining them, but the research does agree on one point: customer acquisition is costly. And when you take into account advertising, managing sales and time spent for conversion, it’s easy to see it’s not just a financial cost, but time and energy too.
Here are four strategies to help increase customer retention:
Read more: The Customer Retention Playbook
1. Personalisation
Blanket marketing is not as effective as it once was. These days, customers expect marketing to be personalised and relevant to them. Your customer data and the insights derived from it, along with customer segmentation, is vital to achieving this. With it, you can ensure that your existing customers receive highly personalised marketing offers that based on their purchase history and the type of customer audience they fall under. You can also apply the same approach to your lead funnel and use personalised, relevant content and offerings to nurture new customers.
2. Exclusivity
Creating special and exclusive offers for your premium customers leads to a more personalised experience for them, which can pay off in many ways. It is about letting your high-value customers know that their loyalty has been noticed, and is valued. Commercial airline loyalty clubs, for example, Air New Zealand’s Koru Club and Lounge, are a perfect example of this. This exclusivity and any associated special perks mean that customers will enjoy their experience with you so much more—and keep coming back.
Did you know: A five per cent lift in customer retention can result in a profit increase as high as 95 per cent.
3. Automation
Automation saves you time, and it keeps your customers in the loop throughout their customer journey. As an example, once a customer has bought your product, you can email them an in-depth guide on how to best make use of that same product, or an FAQ sheet. A flow-on benefit is that it can also free up your customer service reps at the same time, as well as answer common customer questions.
Read more: 3 ways to win back lost customers
4. Quality and speed of service
In today's fast-paced, time-poor world, the speed of customer service has a major impact on customer satisfaction, loyalty, likelihood to buy, so much so that one study found two-thirds of customers consider speed as important as price.
However, as important as service speed is, it is critical to not let the quality of service drop. Research has found service quality is still the most important factor when it comes to customer satisfaction and loyalty. Both these factors—speed and quality—are vital to your business' customer experience. Keep them in mind when training your customer service employees, and when anyone in your business is interacting with your customers.
Want to learn more about customer retention strategies? Check out our free Customer Retention Playbook below.
