How much customers you’re able to retain will impact the success and sustainability of your business going forward.
Just so you know how important this can be, being able to increase customer retention by just 5% will help boost your bottom line by as much as 25%, according to a research conducted by Harvard Business School.
What exactly is customer retention?
Customer retention rate describes how well a business gets to keep its paying customers over time. Making and keeping customers should also be the business of every business and below are a few strategies that can help with this.
How should you improve customer retention?
There are various strategies that will help your business keep its paying customers. Some of the most effective among these strategies are discussed below, based on research.
1. Stand for something.
The Corporate Executive Board surveyed some 7,000 consumers across the US and the research revealed that as much as 64 percent of these consumers attributed their loyalty and relationship to a brand as a result of their shared values. That should be food for thought if you’re yet to identify with something.
2. Leverage positive social proof.
Testimonials, online reviews, and other social proofs will prove very vital in getting customers to trust and rely on your brand. Negative social proof will achieve the opposite effect as well.
3. Appeal to inner ego.
Research has shown that many people prefer products and companies that somehow resemble them. This means you should craft your product, your message, and every other thing to match the needs and yearnings of your target customers.
4. Show your values and difference.
Help customers identify the value of your service or product by making them see what values your product offers them. This is a strong marketing tool but then you need to be able to understand their current position (how they describe their problems) and where they want to be (how you solve their problems).
5. Tell them what they want to hear.
Words carry weight and not every word has the same weight. Free, instantly, new, and a host of other words have more persuasive power than others. In most times, these words may even have a psychological effect on their experience with the product or service they’ll even purchase.
6. Reduce frictions and pain points.
Nearly a quarter of your customers will be conservative spenders or worse still, tightwads. That’s according to research by Wharton University. For this group of consumers, you’ll need to reduce their pain points and eliminate friction. Using reassuring words such as replacing “a $5 fee” to “a one-time $5 fee” or “a small $5 fee” will seem more appealing.
7. Educate customers and don’t just sell.
Don’t leave your customers to fend for themselves.
Ongoing classes and customer support blogs are just a few of the ways by which you can provide useful info to educate your customers so they get more success from patronizing your brand.
8. Show your appreciation.
Nordstrom, Wufoo, and Zappos, all have something in common.
They all understand the power of ‘thank you’ to their customers as simple as this can be. This is a great strategy you should incorporate to better retain your customers.
9. Prioritize quality over speed.
Don’t prioritize speed at the expense of quality.
As important as timeliness can be, it should be secondary to quality. Again, put enough efforts into ensuring you deliver delight with the smallest possible efforts. Don’t sacrifice simplicity just to show off showy gestures that try to imply going the extra mile.
10. Communicate through the right channels.
There will be some channels your customers prefer over others. Rather than trying to work within an established template, it’s always better to pick a channel that will make the most suit your customers and your business.
11. Don’t forget the cause while focusing on the effect.
Don’t just apologize or solve the problem alone. Rather, be sure to also address the root cause as well so other customers won’t have to face the same issues too. Research has shown that customers who are sensitive to price changes are more likely to leave if they encounter some issues with the product, service, or support they’ve got.
12. Reward advocacy.
Time and again, some loyal customers will go out of their way to recommend your business to others. Show them you appreciate their efforts. This can be through simple messages such as a “thank you” to others such as discount offers.
There is no magic, no short cuts, and no one-size fits all approach when it comes to customer retention. Still, a combination of one or all of the above strategies, as well as some others not included in this post, will help you improve your customer retention rate, and boost profits and revenue in the process.
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