We know it is easier and more cost-effective for your business to retain current customers than it is trying to acquire new ones. Improving your customer retention can be the difference between you and your competitors.
To begin, it’s essential for us to understand what customer retention is in order to achieve the ultimate goal of improving it, this is explained below.
Let us look at the different strategies you can easily apply in order to increase your customer retention.
What is customer retention?
This can be easily described as the way in which your business engages with past and present customers to convert them to repeat customers.
With the aim of increasing turnover and profit whilst ensuring you are delivering excellent customer service to your valued customers and building the relationship and your brand image.
After careful consideration, you can decide on the customer retention strategy that will best meet your business model and how much time, effort, and resources you are willing to commit.
The business lifecycle and where your business is currently can also influence your ability and desire to commit to the right retention strategy. Where you will see a new startup looking to acquire customers and market to these, on the opposite scale you can then see an established business focus on the retention of its customers.
What is the average customer retention rate?
Depending on your industry, retention rates can vary significantly.
According to Profitwell, we can see what industry excels and what industry has room to increase their retention rates.
Retail: 63%
Banking: 75%
Telecom: 78%
IT Services: 81%
Insurance: 83%
Benefits of Customer Retention
Let’s have a look at some benefits your business can expect to gain by implementing some of our tips, as below.
- It’s more cost-effective to maintain a customer than it is to acquire a new one.
- Loyal customers usually spend more than a one time customer.
- Repeat customers tend to engage more, leaving reviews and responding positively when they are contacted.
- Increased word of mouth recommendations.
Increase Customer Retention with these strategies below:
Use customer accounts
Seen as a tricky strategy, instantly beneficial for returning customers who will have pre-populated information and their order history on hand. Customers can be more inclined to purchase when their details are already populated in the fields. However, many new customers could be deterred from completing their purchase as they can see this as too large a task.
So, with many customers adopting a preference to complete their transaction as a Guest, how best can you adopt this retention tool?
The solution is to facilitate customers to create their account following their first order. The best of both worlds! It may be worth a thought to let the customers know the benefits of having an account with your site.
Email marketing
Considered by many as the most important customer retention tool.
Email marketing allows you to connect with your customers at both stages before and after the purchase process. All correspondence should add value, be timely and informative to the customers, otherwise you risk losing them in the future.
Follow up emails with your customers can work quite well, especially if your product or service has a certain lifespan. Checking in with your customer with care instructions, useful tips or when the lifetime of the product is approaching, keeps you in their mind for repurchase.
Why not personalise your emails? Reward your customers with a special discount or presale invites or exclusive product announcements to make them feel valued.
Touching base with your customer base to let them know about a new product they may be interested in is also a great way to hit your target market directly as well as have some potential sales!
Another option, within the email marketing strategy, is to check-in and thank the customer after they have received the goods. This allows you to build your positive brand image, answer any questions they may have and even suggest complementary products to encourage add on sales. The possibilities are endless.
Provide a smooth shopping experience
No matter what stage your business is at, providing a smooth and efficient service in a timely manner is what customers expect, without this your business will struggle!!
Exceeding customer expectations will go a long way in increasing customer retention.
When a customer is visiting your website, it is very important everything goes smoothly from start to finish. From the start pages should load quickly, image quality should be high, and all links internally must be working, it’s important not to give this customer a reason to leave your site. As with the start, the end of their experience is just as important. When a customer is checking out it’s imperative, they feel this transaction is safe and secure.
Companies like LumiPay offer a seamless checkout experience that is safe, secure and fast. Adding this payment gateway to your E-commerce site is very easy and worth looking into.
Improve your Customer Service
Sometimes things go wrong, if they do, your customers will expect you to be on hand to advise them and guide them through it. Be it an issue with your website or the product when delivered, striving to constantly improve the service you provide your customers will pay off and set you apart from your competitors.
Depending on your business, you may opt for 24/7 on-hand support by phone, live chat, through your social media platforms or email. A helpful and timely response can ensure the potential sale is not lost. If you have a contact page form, a note to let the customer know the expected response time can keep their expectations in check.
Personalised Marketing
By using information from past orders or abandoned checkouts, you can target customers with the aim of grabbing their attention and completing a purchase.
Google Ads or Social Media marketing are very effective at reaching the desired customer and some of these options you can use to advertise for free.
Personalise your emails to your customer, perhaps on their birthday reward them with a special discount code or extra loyalty points on their accounts.
The time of year it is, celebratory holidays like Christmas and Easter can be a great time to engage with your customer and offer opportunities for your business.
Run a customer loyalty program
There is a reason so many businesses run loyalty programs for their customers, it’s because it works so well as an incentive for customers to return, it drives sales and increases customer retention. It’s a win-win!!
Running a loyalty program is straightforward, it encourages customers to create accounts, providing you with essential data enabling you to market offers and sales to them in the future.
Welcome points/savings can be allocated when an account is set up, applied upon each sale for referring a friend or varied different transactions.
Build relationships
Listen to your customers, get their feedback and act upon it to deliver the best quality in your online store and enhance the customer journey. This is a huge opportunity to increase conversion.
Providing consumers with valuable information, the content that will solve their problems and answer all their questions or concerns. High-quality content, published on a regular basis is a reason for your customers to visit your site and engage with your brand.
You can also use user-generated content which is great social proof that improves your brand’s trust. Ask people to share pictures of the ordered items through social media or in a special section on your website. It’s also good to make a unique hashtag for the products from your store and encourage people to use it every time they share items from your online store. Customer reviews with pictures attached are seen as objective opinions so they can lift sales and loyalty as well.
Today’s consumers expect more – they want to feel special each time they buy something from you. That is why maintaining a relationship with your customers is so important.
Another solution is to create a community around your brand. Give them a space to share the experiences they have with your products. Keep the conversation going and listen to your customers’ needs.
The nurturing process should be as smooth as possible to make customers feel like they wanted to buy from you by themselves. One important part of this is to keep them engaged and build relationships to make them remember you every time they want to buy something online.
Offer promo codes or customer credit for returning customers
Sending a promo code to a new customer can be a really good way to boost your service and it encourages them to return to you and make a purchase.
You can also use this to attract dormant customers, who haven’t made a purchase from you in a while. You could make the discount more appealing by increasing it from the regular 10% to say 15% or take it further and offer €€ credits off their purchase.
Referring a friend is another great promo where every referral who purchases can earn them credit in your online store.
It is important to remember your products/service value, by this I mean, your customers are willing to spend a certain amount on a product/service if they believe there is value in it and that it is worth the cost. Offering discount codes and credits regularly can cheapen your brand image as customers begin to feel that there is always a sale or discount coming shortly.
Profit margins need to be considered also; luxury high-end goods can offer larger margins than small everyday goods. Careful consideration should be given before you decide if this is the right approach for your business to take.
In Summary
It’s fair to say that no matter what stage your business is at, without customers, you simply don’t have a business. Treat your customers well, reward loyalty and continue to build relationships and listen to their feedback. Adopting some, or all, of the above customer retention solutions and spending your time and energy, it will not be long before you will see the benefits of this engagement pay dividend.
