You will probably already have a reasonably good perspective on what you can do to improve your relationship with your customers. But the pressure is real, and if you would like to make sure that your business profit keeps coming in, it pays to focus on customer retention. It’s easier to retain existing customers than it is to get new ones, and it costs you more to acquire new customers as well. And if you increase your rate on customer retention by a mere 5%, you can already increase your business’ profits by as much as 25% to 95%! But what should you know about customer retention, and more importantly, would you like to improve your customer retention rate? Here’s your best guide.
Know the difference between loyalty and retention
Some of us may understandably be confused about what customer loyalty is and how different it is from customer retention. Whilst both concepts are critical, customer loyalty focuses more on how you satisfy your customers and how happy they are with their experience with your brand as well as how likely it is for them to share this experience. But customer retention goes a step further as it analyses the satisfaction of your customers and how it affects your business’ repeat sales.
It’s essential to measure the loyalty of your customers as it can show you how happy they are with their experience. But even if your customers regularly buy from you, it doesn’t follow that you have the best product. Your product may expire too quickly, it may not work well, or your customer may not have found a similar product from a different brand yet. Regardless, you have to measure the loyalty of your customers in addition to their retention so you can have a more complete idea of their satisfaction.
Here’s a takeaway: when you improve your customer loyalty, it follows that you will improve their retention, as a good customer experience consultant knows. But the loyalty of your customers isn’t merely about revenue (maintaining it or preventing its loss) – it’s also about your business’ growth.
What you can do for retention
- Establish expectations as early as possible and as often as possible. If you don’t communicate these expectations with your customers, you can end up disappointing them. They might think you can deliver results for a product right away, but in reality, they will only see the results after a few months, for example. Understand this and communicate it so you can meet your customers’ expectations. Being honest and realistic will give you more positive results.
- It also pays to make special memories based on positive experiences. Research shows that people are more likely to talk about bad experiences than good ones, especially online. So you have to think about how to create a much better and more memorable and positive experience for your customers. If something ‘bad’ happens, like a missed objective or an outage on your product, for example – you will probably over-discuss it and come up with plans to fix it, apologise, and so on. But if something excellent occurs, do you emphasise it as much?
- Don’t forget to ask for customer feedback regularly, and act on it. If there is an issue, be proactive and figure out how to fix it; your customers will appreciate it and will take note and remember it for sure.
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