Many businesses focus on getting more customers when they should be working on improving customer retention. Studies show that a five percent increase in customer retention can increase a customer’s lifetime value by 75%. When they’re more familiar with you and happy with your performance, they buy more from you and are more likely to refer their friends. You don’t even have to expend so many resources and efforts on customer acquisition. Here are four ways to improve customer retention in your organization.
It is one thing to identify the best prospects for cold calling. You probably have a process for converting them into customers. You may have information on your sales team’s conversion rate and the value of each account. However, you need similar data about existing accounts.
Know which accounts are coming up for renewal and have a process for maximizing their odds of renewal. Know which accounts are becoming idle and follow up with them. You need this information so that you don’t lose the business of existing customers.
You can get this information using account-based engagement analytics. You want real-time visibility into every stage of the customer relationship so that you can maximize customer retention. Increased account engagement can help you identify both risks and opportunities that can improve corporate revenue. For example, if you can identify the signs of churn in advance, you can prevent them from leaving.
Companies tend to focus on making the sale and forget about the customer experience once they’ve bought the item. Unfortunately, 60% of consumers have stopped doing business with a company because of bad customer service. This means that your company will pay for poor customer service, whether it is a rude rep in the call center or delivering products late.
One solution is to prioritize dealing with unhappy customers to make them happy. Respond to their requests instead of putting them off, and focus on coming up with a solution. If you can turn the situation around, you dramatically increase the odds they’ll become your most loyal customers.
Consumers are skeptical of marketing efforts. Therefore, companies have to work more than ever to establish trust in a sea of conflicting and competing messages. The solution here is to encourage customer advocacy.
One thing you could do is encourage your best customers to leave online reviews and refer your product or service to their friends. Research shows that 90% of customers trust online reviews as much as they trust personal recommendations. If you highlight their reviews and give them a shout-out on social media, it will make your company seem more trustworthy.
On the flip side, you should collect and analyze customer feedback. Respond to complaints, and determine what you need to change. You may need to implement a customer success program, monitoring customers’ flow through the sale process. Reach out to them to help them before they encounter a problem.
Not every organization can rely on the freemium business model. However, you can almost certainly give something away of value to the customer in exchange for their customer information. It might be a coupon for a discount on their next purchase in exchange for a valid email address or a free download of an industry whitepaper. Give them special offers, especially ones that are tailored to them. Reward your most profitable customers.
The time and energy invested in customer retention offer a return 6 to 7 times greater than acquiring new customers. This is why the best thing you can do to grow your business is to improve customer retention.