Boosting your customer retention rate is key to building a sustainable business model. Depending on your industry, and a study you want to believe in, customer retention is much faster and, on average, costs up to seven times less than customer acquisition. Moreover, repeat customers buy 30% more items than new clients.
What does it mean in terms of profits? According to Bain and Company, increasing customer retention by 5% can lead to an increase in profits of 25%-95%. The likelihood of converting a new lead is 5%-20% at best.
That seems logical. It is much more effective to sell to customers with whom you already have a relationship. After all, you don’t need to attract, educate and convert new leads. Clients who already bought your product or service are usually engaged with the brand. It’s easier to capitalize on their experiences with the company.
What Is Customer Retention
Let’s start with the basics. What exactly is customer retention?
Customer retention is the ability of a company to retain its customers for a specific period. It sounds easy, doesn’t it? Well, in our fast-paced, short attention span society, it’s not.
Most of the new businesses fail not because they can’t attract new customers, but because they don’t have customer retention strategies in place. In other words, churn is killing them.
I hope I had your curiosity, but now I have your attention!
How to Improve Your Customer Retention Rate
We’re in a SaaS business, and our Customer Success Team deal with the needs and wants of our clients on a daily basis. From our experience, it looks like customer retention and loyalty stems from these three factors:
- Building long-lasting and trustworthy relationships
- Providing our customers with knowledge base – educational content on the blog, webinars, etc.
- Be where your customers are and always communicate in a clear and precise manner.
These points can seem very vague, so I prepared a list of 8 customer retention techniques. Let’s dig in!
1. Go The Extra Mile
Impeccable customer experience should be an essential part of your customer retention strategy. We’re true believers in the power of going the extra mile. Your clients want to feel unique and appreciated as you would have done anything to make the contact with your brand more pleasant.
The extra mile approach doesn’t necessarily have to become viral on social media. I can give you one example from last weekend – I was shopping for some bicycle parts and asked customer clerk where I can find them.
Instead of just telling me where it is (“go left, then right, passed through Mordor, and the screws will be right next to the gate to Narnia.” I know I’m exaggerating, but as a person who has major problems distinguishing right from the left that’s how it feels like), he went to the right alley with me and made sure I got the right part.
He literally went the extra, well not mile, but close enough. It’s safe to assume I’ll be back there, no matter how much cheaper the next purchase would be on the Internet.
2. Become a Trusted Advisor
Companies have evolved from being just product sellers to customers’ advisors. That’s why content marketing has become one of the most important parts of marketing strategy. We can choose from thousands of brands across the globe. In the end, we will choose the brand we trust more.
Customer retention marketing should focus on educational content. We hold regular webinars for our users and Facebook live videos when we release new features. And you can always schedule a call with one of our customer success managers if you have any more complicated questions.
It might sound counterintuitive, but if you honestly admit your product is lacking some features and point to your competition, it can pay back in the future. Your customers will remember your frankness and will be more willing to choose or recommend your company next time.
3. Be Proactive When it Comes to Customer Experience
Prevention is better than cure – this saying is as much true when it comes to retaining customers as it is when it comes to health. Show initiative and offer your customers’ help before they ask for it.
Most importantly, this approach allows your customers to save time. They don’t have to look for solutions, on the contrary, you’re handing them on a silver platter.
How to gather feedback from your customers? The best part is that they’re already giving it away, all you have to do is to listen.
A social media monitoring tool, like Brand24, will collect all the mentions containing your chosen keywords.
Start with setting up a project.
In a project creation wizard enter all the keywords you would like to monitor. It can be the name of your company, your branded hashtag, the name of your competition etc.
Then click on Next.
Brand24 will start to collect mentions from the Internet with your predefined keyword. You will see one dashboard with all the mentions from different social media channels, blogs and platforms.
Here’s a collection of data for the New York Times. To boost your customer retention take a look at Sentiment Analysis.
By determining the sentiment of a mention you’ll find the attitude of the author towards your brand, product or service. Analyse the positive and negative mentions and discover the good, the bad, and the ugly of your product.
If there’s a problem only a few customers talk about, there’s probably some silent majority experiencing this problem as well. If you solve so many problems at once, your clients will surely appreciate it.
Don’t worry about missing a negative comment and not responding to it on time. With Brand24 you can get a real-time notification. You’ll receive an email, a notification on Slack or a banner on a mobile app.
What’s the best part? You get a 14 day trial period for free, no credit card required!
4. Make it Personal
We crave personal connections. So, get to know your customers and deliver personalised service to boost customer retention.
Start with being present on the right channels. If your audience is talking about your brand on Twitter, then there’s no point to develop Snapchat strategy.
Thankfully, you don’t need to manually scan all social media channels and look for mentions of your company. Brand24 will do it for you. In the analysis tab, you’ll find the most influential pages and the most popular mentions. That way you can see where people are talking about your product.
Right in the dashboard, you’ll see all the mentions gathered for your keywords. You can filter them accordingly to the social media platform with the highest amount of mentions.
Every social media channel has to be handled differently. You’ll answer differently on Facebook where you can write an answer with an unlimited number of words. Twitter allows only 240 characters in their Tweets, so you have to be more precise.
5. Implement a Reward Program
I just love receiving presents and I bet I’m not the only one. It might be stating the obvious, but customers love it too! Do you have any reward program for long-term customers?
I know that loyalty programs are costly, but remember that pursuing new customers costs much more. Make your loyal customers feel special. Give them a sneak peek into a new collection, samples of new products or invitation to exclusive events.
6. Build a Community Around Your Brand
Building a community around your brand is the new gold standard in marketing. Create a space where your followers can share their experiences. That way your customers will become your brand ambassadors, and that’s the most valuable form of marketing there is.
A great example of community marketing on Facebook is done by Polish cosmetics company, Tolpa. They share their knowledge about different skin care routines as well as user-generated content on a Facebook group. The motto of the group is “Tolpa – small talk, big conversation”.
The main goal is not to sell new creams or peelings. It’s just to talk about problems and joys, just like you would do with a close friend.
The community is thriving – people are exchanging information about where to buy cosmetics, how the products helped them with their skin product and much more.
7. Engage With Your Audience
If you don’t have the resources to build a community around your brand, it would be a good idea to monitor all the mentions of your company closely. That way you can look up all the possibilities to engage with your existing and potential customers. You can show how much you care about them.
8. Show That Your Customers’ Opinion Matters
You don’t have to limit user-generated content only to reposts to your Instagram, Facebook or Twitter. Wouldn’t it be great if you could show off how great your product is? Well, live customer testimonials come to the rescue!
It’s one of our newest widgets. Since word of mouth is one of the most powerful forms of marketing there is, why not build upon it?
All you need to do is to group the mentions from your Brand24 project you’d like to have displayed on your website. The tool will post them on your website just like here:
What are the benefits of this implementation? For starters, you can show authentic statements of your happy customers. The word authentic here is vital – visitors can click on the link, and they are redirected to the source of the mention. Everything is 100% transparent.
Don’t worry about Internet trolls leaving a bunch of nasty comments to discourage your customers. You can choose which comments will appear on your website. My colleague Tom described the live customer testimonials in greater detail, and I hope you’ll enjoy the read.
When it comes to customer retention, half of the success comes from effective communication. The recipe for success is simply to listen to your clients.
The more you communicate, the better chance of building a long-lasting relationship. Customers will feel attached to your business, improving your chances of retaining them.
What’s more, you’ll get to know your clients better, which means you’ll be able to meet their needs more accurately. You can develop a product or service your customers need. That’s a competitive advantage you can’t pass on.
That’s how we got an idea for our latest feature – Locations. Our Customer Success Team had repeatedly been asked about this filter, so our IT department developed and released it just a few weeks ago. Now if you want to see where they are talking about your brand, you just set up the filter, and voila! A list of countries appears in your analysis tab.
Increase Customer Retention to Build a Sustainable Business
Customer retention is a much more sustainable business model than the acquisition of new customers. Don’t get me wrong – you have to attract and convert new leads to grow. My point is, delighting the customers you already have is equally important. Overall, it’s better to have a company with good growth and high-quality customer retention than one with explosive growth but low retention.