Customer retention is much more valuable than customer acquisition. According to Forbes, the success rate of selling to an existing customer is 60% – 70%, while the rate of selling to a new customer is only 5-20%. As a result, you have to step up your efforts to keep a good relationship with your existing customer and enjoy a relatively higher customer retention rate.
High customer retention rates will boost your business conversion rate, increase revenue and profitability, lower your customer acquisition costs, and lessen your efforts on marketing.
What is customer retention rate? Your customer retention rate is a key performance indicator of your business; it measures how many customers make a repeat purchase during a defined period. In other words, it is the number of customers you have kept measured over time. Here is how you can calculate it:
Retaining customers and building a solid relationship with them is a key part of your business as this boosts repetitive buying. How do you do this? Let’s dive into strategies to boost your customer retention rate. Read on.
1. Personalize the shopping experience
Personalization is a great way for you to tailor the shopping experience; it will make you stand out and stay memorable. Track your customer profiles and customize your service to cater to each customer. Make sure they get personalized recommendations and customize the shopping experience based on their own needs.
There are various ways for you to personalize the customer shopping experience. Based on insights, you can recommend items at checkout. If you already do this, try A/B testing, customer feedback surveys, and emails. Deliver your idea and contact these buyers to figure out the best way to cater to their preferences.
2. Start a loyalty program
Loyalty programs have proved one of the best ways to foster loyalty and increase customer retention rate, which in turn, rocket your conversions and profits. Loyalty programs motivate customers to purchase more often in exchange for valuable rewards, essentially incentivizing brand engagement. Similar to giving rewards on customers’ second purchase, starting a loyalty program is very easy, and it makes customers feel special and valued.
You can offer a point system that records their points for each purchase and then translates them into rewards such as discounts or gifts. Another idea is a fee-based program for VIP customers, or a coalition program to partner with another business for co-brand deals, a game program to give customers gifts and discounts, or hybrid program to offer customers special rewards.
When you start a loyalty program, you have to make sure it’s easy for your customers to understand. Have a good onboarding strategy in place for new members. When customers register or make an action, send them an email to show your appreciation. Remember to diversify your loyalty program to allow customers to earn special rewards via different methods.
3. Utilize incentives
Retaining customers through incentives is one of the oldest tricks in the book, but it remains effective. Customers like incentives because they offer them a special bonus or discount. You can leverage this method to increase customer engagement with your brand.
There are many different ways for you to offer incentives. You can incentivize for social shares, bonus for return visits or discounts for a second purchase. For instance, you can surprise a first-time buyer with an incentive for a second purchase if they recommend your business to his/her friends.
Giving additional bonuses and discounts is a great loyalty builder as they encourage customers to come back and purchase again.
4. Become a trusted advisor for your customer
To gain a higher customer retention rate, you have to figure out ways that increase your credibility among your existing customers. When the first time buyer completes their purchase, it’s the starting point of building a trusted customer relationship.
If you offer valuable content consistently, it will give you an edge over your competitors and give you credibility.
Your products and services are tools for them to achieve something so create content that they will value related to how to overcome challenges or tips to solve problems. For instance, product updates, troubleshooting issues, and FAQs, breaking news in your industry, customer success stories, exclusive customer-only content with insider tips and tricks, or offer customer-only perks – these are all valuable and will increase customer engagement with your brand.
Update regularly, send messages or emails or use web push notifications to your website subscribers. Share useful content, and you will gain their trust easily.
5. Stay transparent
To gain customer credibility, you have to stay transparent and give customers as much info as they need. Be straightforward about all your policies and terms and make the details accessible on your website. Be candid about your products and services and make sure your communications are unambiguous. For e-commerce sellers, you have to be open and upfront about everything from payment to return policies.
6. Offer exceptional customer support
Customer support plays a great role in the customers’ decision to stay loyal to your brand.
Effective customer support is efficient, understands customers’ needs, and addresses their problems professionally. Leveraging a live chat or help desk tool can turn a customer question into a sale or a customer complaint into a resolution.
You can expand your customer support options by delivering an online self-service portal or live chat to respond to the queries of customers immediately. Offer omnichannel service experience to increase customer satisfaction and respond to all requests quickly. Exceed their expectations and stay polite and professional when dealing with customers’ queries and complaints.
7. Engage customers wherever they are
To retain your customers, it’s important for you to figure out ways to engage with them to remind them that you are there for their needs. There are diversified platforms for customers to engage with their favorite brands. Thus, you have to engage customers wherever they are. You can engage them through social media.
You can build your brand social proof, and share your brand content consistently to keep your customers engaged. Sharing content is a great way to stay active on social media; share news, answer questions and address complaints. If you have subscribers, send emails and update them with valuable content.
Remember that each platform should work cohesively to offer a seamless experience for your customers. For instance, if a customer abandons their shopping cart, you can send an email to follow-up.
8. Ask for customer feedback
Listen to your customers; you will never know what they want from your business until you ask for feedback. What they tell you will help you optimize your business, make better business decisions, and improve customer retention.
Feedback comes in many ways and can include product feedback, customer satisfaction, and seller rating. How your customer feels about your product or services, and their concerns will give you the necessary info to improve your products. The customers’ feeling about your service, communication, and after-sale service is important too. Your customers’ comments will give you valuable insight into your business to increase customer retention.
9. Listen to customer complaints and act on them
Customer complaints happen from time to time, and they affect your customer satisfaction rate. To deal with complaints, stay calm, and figure out the real situation. Listen to the problem first before you negotiate a solution. Receiving a complaint offers a great opportunity for you to improve your service and customer relationship.
By listening, you will understand the problems and be able to take action. Emphasize customer service to encourage them to come back and do business with you again.
10. Keep your promise
It’s not as hard as you think to earn customer trust and satisfaction. It can be quite easy, be honest, and keep every promise you make.
Sellers who overstate the benefits of their products or services to get leads will ultimately harm their business when what they deliver doesn’t match the buyer’s expectation.
Often these customers require a refund, and they will not return and instead go to your competitors. To make matters worse, they could share their shopping experience with the people in their network.
Only promise what you are 100% sure about; be conservative, customers will appreciate it, and you will enjoy high customer satisfaction from customers who are more likely to repeat purchase.
Increasing customer retention rate is an ongoing task that you can’t ignore. We’ve shared our best ten tips to help you. If you are struggling, place some of them into practice but be patient. None of them will make miracles and yield fruits overnight. Be consist, and they will make a significant difference in boosting your customer retention rate and fostering customer loyalty.
Now, it’s time for you to take action and implement them based on your business needs.