As the marketing world increasingly vies for the attention of the consumer, the difficulty of acquiring new customers grows with it.
Within that lies an opportunity: by focusing on retaining your current customers, rather than spending money trying to acquire new ones, you can explosively grow your bottom line. The cost to attract a new customer is estimated to be anywhere from five to 25 times more than retaining an existing one, providing a huge competitive advantage to businesses that focus on retention over acquisition.
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What is Customer Retention?
Customer Retention, quite simply, is the act of turning your first time customers into repeat buyers, and keeping them away from your competitors. It’s the process of developing relationships with your client base and creating strategies to ensure they continue coming back. The best way to do that is by providing a stellar customer experience.
Customer retention has always been important, but it’s become increasingly more critical in today’s digital age. As more businesses compete for a piece of the global market, the cost of acquiring new customers has skyrocketed. At the same time, customer loyalty has decreased because people are likely to switch allegiances when a better offer comes along.
That’s where customer retention comes in. Focusing on listening and engaging with your current customers rather than chasing new ones can have a significant impact on your bottom line.
This is most evident in the competitive restaurant business. Customer experiences while dining are rapidly changing and owners need the tools to keep up.
In addition to cutting costs, Customer Retention has a number of other benefits for businesses that are often overlooked:
When customers know that you’re focused on keeping them around, they’re more likely to trust you with their business. That trust is important, as it can lead to referrals, repeat business, and higher customer lifetime value (more on this later).
Happy customers are more likely to become brand ambassadors, spreading the word about your company to their friends and family. This can result in more referrals, which is great for business growth.
Focusing on Customer Retention can also boost morale within your company. Employees who feel like they’re working towards a common goal and are socially rewarded by keeping customers happy (through praise and a positive working experience) are generally more engaged and productive. This can result in a better bottom line for your business.
Churn is the rate at which customers leave your company, and it’s something that all businesses should be concerned about. Reducing churn can have a significant impact on your net profit because it allows you to keep paying customers save money on acquiring new customers.
Customer lifetime value is how much a customer is worth to your business over the course of their relationship with you. As we mentioned earlier, it’s much more expensive to acquire a new customer than it is to retain an existing one.
Happy customers are more likely to invest in your more expensive products and come back regularly looking for me. Research by Altfeld shows us that existing customers are between 60% to 70% more likely to buy when compared to a new one.
Improving Customer Retention is easier said than done – it requires a concerted effort to understand your customers and what they want from your business. Once you have that understanding, you need to now deliver on it with an exceptional customer experience.
As a retention-centric company, Retention360 knows the complexity involved in providing an excellent Customer Experience. That’s why we’ve put together a step-by-step guide to customer retention, which will walk you through the basics of what you need to do to improve retention rates in your own business.
The first step in any good Customer Retention strategy is knowing your customers inside and out. This means understanding their needs, wants, and behavior as it relates to your offerings.
You capture this data in a variety of ways, including surveys, focus groups, customer interviews, and data analysis. Customer Retention software like Retention can help automate the process, by streamlining your customer survey creation and providing tools that allow direct communication between customer success teams and product users.
After you collect data on your customers, you can use it to create customer personas – fictional representations of your average client. Personas let marketing teams and salespeople visualize their target and craft specific messaging that resonates with them.
Churning through your data collection results can be tedious – and that’s exactly where Customer Retention software can be useful. Automated sentiment analysis tools like Retention360 allows your retention teams to quickly sift through hundreds of reviews to identify the critical negative customer experiences to address their concerns and limit the chance of churn.
Not all customers are created equal, and they shouldn’t be treated as such. Segmenting your customers allows you to customize your businesses interaction with them, creating a meaningful touchpoint that keep customers coming back.
There are a variety of ways to segment customers, but the most common approaches include dividing them by their:
– Relationship to your company (e.g. first-time visitors, returning customers, etc.)
– Demographics (e.g. age, gender, location, etc.)
– Psychographics (e.g. interests, values, lifestyle)
The Customer Journey is the path a customer takes when exploring your business; starting with the first interaction and leading to an eventual conversion. Mapping the Customer Journey is essential to understanding how customers interact with your business and at what points along their journey they drop off.
You can use this information to improve your website and marketing efforts, as well as your customer service and product offerings. Visualizing and tracking the customer journey for each of your customer segments is crucial to success.
Their physical journey is also important to consider: does the average customer visit multiple business locations, or do they stick with the one nearest to their geographic area? Retention360’s Reporting Dashboard breaks down customer feedback by location, allowing you to dive into comparative statistics between different locations.
Save Thousands Focusing On Retention.
See how using Retention360 can help keep your customers coming back and revenue growing.
An important component of Customer Retention is Online Reputation Management. In today’s digital age, customers are running to Yelp, Google and Social Media to leave reviews and vent about their experience with your business. It’s important that you have a process to address these digital reviews and manage how your business is perceived online.
Online Reputation Management is the process of monitoring, managing, and influencing your company’s online reputation. This can include anything from monitoring customer reviews on Yelp and TripAdvisor, to proactively publishing positive content about your business on social media and other online platforms to build your reputation.
The goal of Reputation Management is to ensure that your business’ web presence is as positive as possible, ultimately improving your companies rate of retention. In fact, a study by the Harvard Business Review found that businesses with a strong online reputation are five times more likely to be successful than those without one.
Retention360 keeps online reputation management top-of-mind with our social media response tool – giving you the ability to see, respond to customers with negative sentiment in real-time. By proactively monitoring your online reputation and quickly responding, you can safeguard your business’ hard-earned reputation while reducing customer churn.
Below you can find important terms to know surrounding Customer Retention.
Positive Customer Experience: When a customer goes through a stress-free interaction with your business leaving them fulfilled.
Negative Customer Experience: When a customer is left feeling unheard or unseen, and their interaction with your business is unpleasant.
Customer Journey: The complete experience of a customer dealing with your business. From the very first interaction all the way to the end, going across all touch points. Not just looking at the transactions, but also the communication, and how they feel after every single interaction with the brand. No matter how small.
Customer Feedback Survey: A form sent to your customers designed to understand how they feel about your business. Allowing them to request changes or improvements they may want to see implemented. (can be sent over different channels – social, email, etc.)
Customer Engagement: The process of building relationships with customers and creating a two-way communication channel.
Reputation Management: How you manage the customers views of your business. Including monitoring the conversations, reviews, and overall perception of your business.
Effective software is the single most important determining factor in the effectiveness of your Customer Retention and Online Reputation Management. Our software, Retention360, is an advanced Customer Retention platform specializing in reducing churn by providing direct and immediate communication channels between your Support Team and your customers.
With Retention360, you can track your online reputation in real-time, identify and respond to negative reviews, and turn unhappy customers into brand advocates.
The most popular features of Retention360 include:
Retention360 also includes a renowned direct response tool that allows you to send high-quality automatic responses to every customer review, whether favorable or not. Our software helps you address feedback quickly, efficiently and with a personalized touch.
If you’re curious about how our app works, request a demo today. See for yourself how Retention360 can help you protect and grow your business!
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In their 2018 CX review, Gartner predicted that customer experience would become the key differentiator for 81 percent of businesses in the years to follow.
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Retention360 goes beyond the standard customer satisfaction survey. Our platform offers fact-based, customer-driven data that helps you identify specific customer experiences for a personalized solution.
