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12 Customer Retention Strategies Businesses Should Use

By Magellan Solutions

Updated on June 3, 2024

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Staying on top is difficult in this digital age as the competition increases and becomes more intense. With all the advertisements people see on the internet daily, customers can quickly jump from your brand to another if you don’t have robust customer retention strategies.


To make your business thrive, you must take care of one of your most important assets — your customers. Yes, companies need new clients, but a customer retention program is equally valuable as that.


Companies focus a lot on generating leads but lack what will make their existing customers stay. They might be unaware that 68% of sales come from existing clients. A business may have only 12% to 15% loyal customers, but this small percentage commonly represents 55% to 70% of sales.


Your ultimate goal should be customer retention ideas. If you don’t see it this way, you might lose much more than you think. Winning the loyalty of your current customers is cheaper than getting new leads from time to time.


What is Customer Retention?


Customer retention is encouraging clients to patronize your products or services for the long term and make them loyal to your brand. Aside from the retention rate you can evaluate, you can also determine how good and effective your customer service is.


To clarify, in addition to customer retention itself, there are also customer retention strategies. These are techniques to build customer relationships and maximize revenue for each one. These are the plans of action you utilize to make your clients stay loyal to your brand and provide them with great experience and value-for-money products.


Importance of Having Strong Customer Retention Strategies


According to an Econsultancy report, retaining customers is way cheaper than customer acquisition. If you want to maximize your expenses, it would be an ideal strategy. Moreover, a study shows that loyal clients are more likely to spend up to 23% more than average customers. This will increase your profit.


But the most exciting and priceless part of having robust customer retention strategies is that your customers who love your products or services can instantly be your brand ambassadors for free.


Please note that 60% of consumers talk about a brand they like. They share positive feedback with their relatives, friends, and colleagues. With this, word of mouth may increase exponentially. Thus, allowing you to get possible sales without spending on lead generation.


Customer Retention Strategies That Work


Yes, it is not easy to encourage customers to stay associated with your brand for the long term. However, there is nothing wrong with trying to win their hearts and loyalty with different techniques. Look at the following customer retention strategies that boost your retention stats.


Loyalty Begins at Your Home


Gaining strong customer loyalty is much easier if you start from within — in an environment where your employees are continuously thriving. While everyone is trying to put more emphasis on the front lines of a business, you mustn’t leave anyone behind. Spend a great deal of time and effort keeping everyone behind the success of your business happy, from sales, help desk, and customer service representatives down to accounting, billing support, and many more.


Inspire with a Mission


One of the ways to win customers is through their hearts. Sometimes brands get the loyalty of consumers because of what they stand for. Consumers nowadays are becoming more aware of a lot of things. An example of this is a brand that aims to inspire people to shift to more eco-friendly products like what they are offering. Since more consumers today are concerned about our environment, they will change to your brand.


Find something that people care about and position your brand around it. But don’t oversell your mission. Stay true to it and live with it.


Provide Exceptional Customer Service


Continued improvement of your customer service is healthy for your business. Having exceptional customer service is a brand’s best customer retention strategy. Consumers don’t always base their purchase decision on the product itself but commonly on how excellent your customer service is.


Consumers have their communication preferences. To accommodate the vast number of customers, provide multiple contact channels. Responding and resolving customer issues instantly put plus points to your brand. This is why real-time customer engagement is essential. Your agents must be trained to assist customers proactively. It is one of the best customer retention practices that helps. And most importantly, apologize when you make mistakes. Being honest and humble to your clients could make you win them again.


Adapt to Changing CX Tools & Technologies


As your customer base grows, it also means that you need to expand your team of customer service support to cater to all inquiries and concerns. However, hiring more people is expensive. This is when customer service tools greatly help your business and your people.


If you let your customer support team handle many clients that are obviously behind what they are capable of, you are letting them down by exhausting them with their work. But when funneled with practical and helpful tools for their daily workflow, doing the tasks can become more accessible for them. Your operations will not be affected, and you can continually provide good customer service.


Build Your Customer Loyalty Programs Right


Please plan, plan it well. Set a goal. If your goal is to keep 80 percent of your present customer base and launch a strategy that improves it to 90 percent, your business achieves 10 percent growth. Look at your current business plan and find ways to increase customer retention. Some effective customer retention tactics are product differentiation and multiple product offerings for the same customer. More importantly, come up with great marketing activities for current customers.


Make it profitable for both you and your clients. Give them value every time they purchase, such as giving them a head start and making them VIPs. Creating a loyalty program can be simple, as customers appreciate even the simplest things you do for them.


Always Delight Your Customers


If you want your clients to stick with you, finding ways to delight them consistently is one of the best customer retention strategies. Go the extra mile to deliver a delightful customer experience. Occasionally, give them exclusive surprises and discounts, especially those genuinely loyal to your brand. Make them feel as if they are part of a particular club.


But wait, it doesn’t necessarily need to revolve around your products and services. You can also send them customized season greeting cards, birthday cards, or even a thank you letter for staying devoted to your brand. Their loyalty deserves to be appreciated always.


Another way to show them they are valued is by empowering them with convenience. Make your products and services as accessible as possible. You must know what your consumers want as well as their behavior. Then Create tools and systems based on these.


Undersell But Overdeliver


Promises raise expectations. Remember the rule to underpromise and overdeliver in running a business to avoid disappointing customers. Promising what you can’t deliver is harmful to your business.


You might want to think twice before you tell your clients something that will make them expect something from you. An unsatisfied customer will likely inform 20 more people about her negative experience with the brand.


To make it more clear, an example of this is when you tell a client that his order will be ready in 15 minutes, make sure it will be there in 10 minutes. This way, you can make your customers keep coming back to you.


Don’t Just Sell — Educate


Customers appreciate it when you provide information about your products or services. Remember that clients commonly spend based on what your products can do and not on how it looks. It is almost like giving them the most out of what you are offering. A study showed that 32% of clients repurchase or recommend a brand that does this. Thus, feeding them with all the details could be your ticket to the top.


Moreover, keeping them on track with the latest developments in your company is also a great move. You can send an email newsletter, which according to Nielsen Norman Group, is excellent for growing and maintaining customer relationships. It would also be ideal to develop educational resources such as blogs, how-to videos and training, and other possible materials to ensure they use your products successfully. Include a submit feedback feature to savor the opportunity of having them in the loop. This can make them feel valuable to your business and keep returning.


Be Active in Your Community


One of the best customer retention strategies is letting consumers know you care about your community. They don’t want to be in business with a cold corporate entity. This is the time to show off your sincerity in giving back to the community; never fake it.


You don’t necessarily need to do or spend a lot. You can do many simple things to show that your brand has a genuine heart. People appreciate even the most straightforward thing a brand does. You need to be consistent and creative with your plans.


Make Use of Customer Complaints


You may not know precisely what is wrong until you hear customer feedback. Customers with complaints conveyed through email or phone are good because they can guide your business to check in those areas that need improvement. The truth is when customers are not happy, they will not complain to you directly. They will tell everyone else they know, and they will bring their business to your competition. This is why there is a growing trend in finding approaches to listen to the voice of the customer through quick surveys and after-sales calls.


In addition, sending customers a quick survey every half of the year to help you improve your products and services is a plus point. It should be a mix of questions with choices and a free-text answer field to allow them to express their opinions freely. Customers appreciate it when you ask for their opinion. It makes them feel you care about them.


Maintain Customer Communication


Connect, listen, and empathize with your clients to build trust. One of the ways to continue getting in touch with your customers is through email. Nourish customer loyalty by ensuring that all the emails you send will add value to their experience, as you might risk losing them if you don’t. Just a tip, personalize your communications and target content that is interesting and engaging to consumers. Partner it with eye-catching visuals to get their attention.


Maintain regular communication, but never spam them. Developing a communication calendar to track your emails’ consistency and content strategy would be best. If you keep routine contact, the percentage of them returning to you can increase.


Keep Track of Customer Retention Metrics


Having a list of customer retention strategies is not the end of the plan. If you want to maximize your effort and make it work, you must also ensure that these techniques are effective by measuring their efficiency. The critical customer retention metrics are attrition rate, repeat customer rate, and customer lifetime value.


Tracking the metrics regularly can help you improve the way you do things. It will guide you to identify which strategies are effective and which are not.


There are no shortcuts to success. If you want your business to thrive and achieve its goals, you must work hard for it. And your customers will be your ticket. Take good care of them and ensure they will always return to your brand with the help of the above customer retention strategies we shared with you. Hiring a competitive outsourcing company could also increase your chances of gaining more loyal customers. It may be of great help to your business.

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      12 Customer Retention Strategies Businesses Should Use

      Magellan Solutions

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