Customer retention is often an overlooked strategy by small businesses. It focuses on retaining customers over a period and eventually become loyal to your brand. Therefore, as I just said, many businesses focus too much on bringing new customers and fail to make their current ones stay loyal.
This post will discuss the financial impact of a good customer retention strategy, how to increase it, and finally discuss and hypothetical case study.
Benefits of a customer retention strategy
To begin, one of the most important benefits of increasing customer retention is the financial impact. For instance, research shows that increasing retention by 5% can increase profit from 25 to 95 percent. Firstly, because acquiring new customers is more expensive, secondly, frequent customers require less customer support, and finally, loyal customers are more likely to pay a price premium.
Also, from a marketing perspective having high customer retention is a powerful asset to have. For example, repeat customers can be targeted for upgrades in subscription or can become advocates and bring their friends as consumers for your brand.
How to increase customer retention
There are many strategies to increase customer retention, but I would divide them into three areas: Get to know your customer, go beyond, and anticipate the pain.
Firstly, it’s important to know your customers. For instance, little details like personalizing their names on emails or greeting them at your store. In other words, invest time in creating a relationship with your customers. Also, implement a feedback system where they can share positive and negative feedback, share frequent surveys to understand their needs and wants, and finally if needed, make sure to reach out to solve any wrongs.
Secondly, it’s important to go beyond the minimal effort for our customers while maintaining profitability. In fact, some of the great details that make customers stay are not expensive. Remembering their birthdays, communicating effectively, and ensuring that you deliver on your promises makes a huge difference. Also, you can give a nice reinforcement with an award or prize depending on your business from time to time.
Finally, it’s important to develop a culture that anticipates service. This comes from strong and dedicated customer service. For example, if you own a hotel and have customers coming for their honeymoon and getting them complimentary champagne and making sure their experience is memorable can make them come back.
In conclusion, increasing customer retention has both financial and marketing benefits often overlook. Therefore, is key for brands to focus on keeping their current customers happy and turn them into loyal advocates. Success comes from listening and paying attention to the small details.
I hope you enjoyed this post. If you liked this content, please check out my last post on B2B and B2C marketing.