Senior Writer: Priya Naha
Summary: Customer retention is a must for successful businesses. Customer retention means companies use a metric to measure customers’ loyalty over time and scale the growth of the business. This blog will discuss some of the most effective strategies to help companies retain customers and ensure effective business growth.
When the customer comes first, the customer will last.
The more loyal customers, the better it is for your business. Acquiring new customers is a plus point, but retaining existing customers is phenomenal. But, how do you do it?This blog will answer every query for you. We’ll deal with everything from talking about customer retention to working on customer retention strategies.
But before that, can you answer this question:
What is Customer Retention?
Customer retention means a metric that companies use to measure customer loyalty over a time period and scale the business’s overall success.
Business organizations use multiple tactics to retain customers, meet customer expectations and improve customer experience. The organizations ensure to boost customer retention and maintain customer loyalty.
How Do You Calculate Customer Retention Rate?
To calculate the customer retention rate, you need to divide the total number of customers from new customers by the number of customers acquired at the beginning. However, you need to remember that the customer retention formula is incomplete without knowing the customer churn.
9 Unique Ways to Retain Customers
Is customer retention important? Of course, it is! Retaining customers is comparatively more cost-effective than acquiring new customers. In addition, with effective loyalty programs, your current customers will ensure positive word of mouth marketing about your brand to their friends and family.
And did you know that by increasing customer retention rates by just 5%, you can increase revenue by 25%-95%?
Let’s look at some of the most effective ways to increase customer retention:
- Create a strong onboarding experience
- Provide personalized customer experiences
- Build trust with your customers
- Implement a customer feedback loop
- Maintain a customer communication calendar
- Send a company newsletter
- Start a customer education program
- Offer unique service
- Start customer retention programs
1. Create a Strong Onboarding Experience
The first impression is the last. And for customers, this is the actual case! Companies attract customers by creating a memorable first impression. When a customer purchases a product or service, your company has the opportunity to create a fantastic customer experience. So, ensure that the onboarding process is smooth.
If your company mishandles information in the initial onboarding, it might leave a bitter impression on the customers. A good onboarding process must include the onboarding program’s effectiveness and exceed customer expectations.
To empower customers and impress them, businesses must have workflows with self-service knowledge, celebratory messaging, follow-up messaging, and well-timed email triggers.
2. Provide Personalized Customer Experiences
A one-size-fits-all approach doesn’t fit every customer. Instead, customers may look for tailored solution needs from your business. Providing a customized customer experience is one strong customer retention strategy. You want to avoid the exact solutions for customers that need a product or service catering to time limits, differing scales, and numerous other preferences.
According to Evergage, 78% of marketing team members claim that personalization has a “strong” or “extremely strong” impact on advancing customer relationship management.In fact, it also states that 99% of marketers say personalization helps promote customer engagement and relationships.
Your company must offer relevant and personalized solutions to all customer complaints so that the loyal customers feel inclined to continue business with you.
3. Build Trust with Your Customers
Building customer loyalty is one of the crucial customer retention strategies. Always ensure two things when it comes to building customer loyalty:
- Don’t assume that your existing customers trust you because they buy from you.
- Remember, that it takes time to build trust.
81% of customers state that trust is essential when making a purchase decision. However, you cannot implement trust overnight. It takes time, and once trust is built, those existing customers become your loyal customers. To ensure that your company manages client retention , you need to work on delivering value to retain customers.
Be consistent with your brand promise and do what you say over time. Such factors will enhance customer lifetime value and improve customer relationships.
4. Implement Customer Feedback Loop
Customer feedback is one of the essential customer retention strategies. You need to collect customer feedback and share it with your organization to retain customers. And this is where a feedback loop comes in! The loop provides a system for analyzing, distributing, and collecting customer surveys and reviews.
Once you’ve gathered the feedback, you need to analyze the results by looking for trends in customer behavior and other areas to enhance customer relationships, customer experience and offer excellent customer service.You need to share the review and survey results of the product or service with the teams that’ll benefit the most from it!
5. Maintain Customer Communication Calendar
Customers don’t always reach out with feedback. So, maintaining a communication calendar is an important customer retention strategy.
Your customer support team must be active in communicating with your existing customer squad. For example, if some of your loyal customers haven’t interacted with your brand in a while, you need to reach out and reestablish the customer journey.
Manage customer engagement and create opportunities to cross-sell and up-sell by adopting a communication calendar. Customer retention strategies that work aren’t the most challenging ones but the ones implemented cleverly.
With a communication calendar, the customer support team can keep track of communication and the time customers reach out to your brand. The team can also issue an alert when existing customers feel discouraged with your service and haven’t interacted with your brand.
Maintaining a communication calendar makes launching promotional offers for customer loyalty programs and enhancing customer relationships easier.
A company newsletter is among the retention strategies that work. It is a cost-effective and simple way to retain customers as it can enhance your company’s notability and reputation.
Companies can use email automation to offer and send updates to all their customers simultaneously! Even though it’s simple, company newsletters can remind customers of your brand and business every time they open their inbox.
7. Start a Customer Education Program
You can demonstrate a long-term investment in your customer base with a client education program. With this initiative, your business can create multiple customer self-service tools like a community forum and a knowledge base.
Customers use these features to locate solutions to service problems before reaching out to the support team. The client education program can extend beyond the products and services and is one of the best customer retention strategies.
8. Offer Unique Services
Be unique, be you.
The more unique you are with your brand, the more effective your customer loyalty program is! To offer a product or service that stands out from your competitors isn’t an easy feat, but in the long run, the reward is worth it.
If your company has developed a niche for your business that solves an essential pain point, you are definitely on the right track to retaining customers.
People buy what holds value to them. So to improve customer retention, remove a kink in the workflow and automate processes in a way no other organization can! Turn every bit of your service for your customers. It is one of the most effective client retention strategies.
9. Start Customer Retention Programs
Client retention definition states a metric used by businesses to measure customer lifetime value over a while and gauge its overall success. Effective customer retention programs are a blend of several tactics. For every business case, there’s a retention program.
Companies derive more value from a product by retaining customers. Companies can encourage customers to share feedback and influence potential customers.
In fact, customer retention tactics enable customer loyalty of retained customers. We’ll now discuss customer retention definition, and some excellent customer retention strategies for meeting customer expectations.
What is Customer Retention Definition?
Customer retention refers to an organization’s ability to turn buyers into loyal customers and prevent them from switching to a competitor.
What is Client Retention Definition?
Client retention definition indicates whether your quality of service or product offers customer satisfaction to your loyal customers.
10 Best Customer Retention Strategies that Actually Work
Maintaining marketing retention strategies for customers coming to your brand are as challenging as existing client retention strategy programs. But, the efforts are worth the result.
Having a great product isn’t the only customer retention strategy. Companies have to put in extra effort for high customer retention rates. Customer retention strategies are the initiatives and processes small business owners use to improve customer lifetime value and build a loyalty program for customers.
Let’s take a look at some of the best retention strategies that work to build customer relationships:
- Apologize When you Make Mistakes
- Adopt Customer Service Tools
- Inspire with a Mission
- Empower Customers with Convenience
- Leverage Personalization
- Speak to Your Customers
- Create a Divide Between You and Your Competitors
- Use Subscriptions to Bolster the Experience
- Use Experiences to Elicit Positive Feelings
- Capitalize on Social Proof
1. Adopt Customer Service Tools
If you are a small or mid-sized business, your support team will have only a few people. But, with a gradual rise in the customer base, the service demand might spike.
And you might need to expand the bandwidth of your team. But hiring isn’t a piece of cake. So, companies get help from technology to supplement their great customer service interactions and necessities.Y ou can get help from customer service tools and improve your clients’ customer experience and satisfaction.
2. Apologize When you Make Mistakes
Even if you are careful, mistakes are something that happens! So whenever it happens, apologize and get it fixed. Retaining existing customers is a long-time investment and apologizing for mistakes is one effective customer retention strategy.
Whether the mistake is a billing error, an outrage, a data breach, or anything, a mistake can put your company at risk and waver the customer retention metrics. So, develop a plan to promptly solve the mistake, apologize genuinely, and increase customer retention rates.
3. Inspire with a Mission
Make the vision you aspire for your company; your primary mission. Most of the time, a brand inspires business loyalty, not through systems and tactics but what it stands for!
Build your marketing retention strategy around something beneficial to your business and encourage customer retention programs.
4. Empower Customers with Convenience
You may be from any industry, but you must make your product convenient for your users. Moreover, you also need to offer quality service to maintain the customer’s lifetime value.
You need to be innovative with your marketing retention strategies. For example, try to encourage customers with innovative loyalty programs. Use the best customer retention programs tactics so that customers do word of mouth marketing for you and turn your tables.
5. Leverage Personalization
When it comes to the personalization of products and services, people are always on priority. Customers want to be treated like people by customizing services and recommendations.
Moreover, the customers also want to see the humanity of your brand. Coming across as genuine, authentic, and human can be challenging for companies. But customer service with a human touch is one effective customer retention strategy.
To start with such an approach, businesses must identify their audience personas and communicate with them on their most used and preferred channels. In such a way, you can encourage customers to speak with you directly. Make it a part of your messaging and remind your customers during and after the buying experience.
Customer support queries must always be welcome. Always add personality to your message. Nobody likes an automated response. However, as it is a part of your retention strategy, ensure that whatever you communicate seems like it comes from a human.
6. Speak to Your Customers
Your customers mustn’t feel lonely in the customer journey. Any business must connect, listen and understand its customers. Learn from your first-hand accounts about what is going right or wrong in your customer acquisition and customer retention strategy.
You need to develop strong long-term business relationships with your clients. In addition, companies must solidify customer retention metrics with strict service level agreements and rapid response times.
Companies must also encourage customer satisfaction surveys. With such reports, businesses can identify unhappy customers before they churn. Businesses must also encourage one-on-one client conversations. It is one of the most effective client retention strategies.
7. Create a Divide Between You and Your Competitors
Stand tall amongst your sea of competitors. You have a reputation and identity to maintain. And setting yourself apart from your competitors will help your business establish authority.
Stick true to who you are. Such a genuine approach shows your brand integrity and makes it easier to attract customers who might become your best word of mouth marketers and advocates. Don’t fret about being a little bold with your marketing tactics. Remember, the visually appealing one is also the one that sells the most.
Risks are always worth a try.
8. Use Subscriptions to Bolster the Experience
Customer success teams must ensure a memorable customer experience for lifetime value customers rather than one-time buyers. You can use subscriptions to achieve growth goals and improve customer retention. However, gaining loyalty programs doesn’t mean you must charge a fee for your subscription model.
You can provide benefits, exclusive events, and content to leverage the subscription approach without spending too much money. Offer things that your customers want. Understanding your target audience’s challenges and desires also manages customer retention.
9. Use Experiences to Elicit Positive Feelings
Companies and brands have used experiential marketing to create positive sentiments with customers. And tapping into customers’ sentiments is worth a try!
You need to figure out ways to tap into the positive hype around an event and provide an incredible customer experience to reach beyond the point of sale. Companies must look for ways to create positive feelings in the form of exciting new experiences outside their services, value propositions, and leading products.
You may whack your heads and create advertisements. But, it may still not work! You need to accept that sometimes the most extraordinary form of advertising isn’t your own. In fact, customers trust more word of mouth marketing done by family, friends, and other consumers than other branded content advertisements.
You need to utilize the power of customer experience testimonials and customer stories. In addition, companies must use social proof to show potential customers the value of their products. And word of mouth marketing is one of the best options. In fact, no customer data can measure customer retention metrics better than customer experience testimonials.
97% of customers report that online customer reviews play a significant role in influencing their buying decisions. FOMO (fear of missing out) is an effective marketing and retention strategy. When customers see multiple other brands and individuals use a product, it makes them do it too.
Customer experience testimonials work better than any customer data in customer acquisition and retention. The testimonials and word of mouth marketing convince existing customers to upgrade their products or stick around.
No metrics can beat a loyal customer who highlights the positive stories of your brand.
What is Customer Retention Program?
A retention program is an initiative to encourage customer loyalty.
The programs can be company-led, like incorporating a customer onboarding process, or customer-led, like using a mobile app to make purchases. https://hbr.org/2014/10/the-value-of-keeping-the-right-customers
Customer retention strategy is crucial because, according to Harvard Business Review, acquiring new customers can be 5 to 25 times more expensive than holding on to an existing customer.
There are numerous types of client retention strategy programs that you can start for your organization. We’ve got your back if you are in a fix about which type of customer retention strategy to implement.
5 Types of Customer Retention Programs
Here’s a list of customer retention Programs you can implement to delight your existing customers and ensure lifetime value:
- Onboarding Program
- Customer Loyalty Programs
- Customer Advisory Board
- Corporate Social Responsibility Program
- Beta Testing Group Program
1. Onboarding Program
The onboarding program is a customer success function that helps customers use your company’s product or service. The company representatives teach the customers by personalizing the training according to their needs.
It saves time for the customers, and they get enough knowledge about the product or service. Onboarding is an excellent customer retention strategy example as it prevents churn with new customers.When first-time users explore your product, they may get frustrated if they don’t understand its implications well.
So, onboarding ensures that customers know to utilize your business products or services to complete their goals on time.
2. Customer Loyalty Programs
Yes, focusing on customers at risk of churn is necessary, but don’t forget your loyal customers in the process. A customer loyalty program must reward customers for staying loyal to the brand and for their continued commitment and support.
The more the customers shop and interact with your brand, the more rewards they get. It is one of the best customer retention examples as the customers get more from experience than just your company’s product or service.
Numerous customers stand taller than the rest of your customer base and spend more on your brand. The customer loyalty program encourages them to come back to you. It is one fine customer retention strategy example. Some companies offer point-based programs each time a customer makes a purchase.
After the customers collect certain points, they are liable to receive a free product or a discount. And as the points can only be redeemed from your company, the customers return to you.
3. Customer Advisory Board
By now, you know that your loyal customers are also your most valuable customers. So it is not only about the money but also the information they provide. Your loyal customers tell you why you love your brand and make you aware of the areas for improvement.
If you create a panel of these customers, you can fine-tune services and products at your business. Moreover, you can also increase advocacy of customers by encouraging participants to share their reviews publicly. Customer testimonials are among the top customer retention examples that help build rapport for engaging and attracting potential leads.
It’s not always about the product your company delivers. Your company is beyond that! Customers look at everything your organization sells, buys, and advertises to the target audience. If your customers notice any inconsistency between your brand’s messaging and its actions, they’ll be the first to recognize it.
So, it is essential to involve your customers beyond selling your products or services. Create a Corporate Social Responsibility program (CSR) by considering the customers’ values that pursue a moral goal.
It’s not necessary that your initiative has to be ambitious. But, being involved with your customer’s personal goals is one great way to showcase your commitment to their needs.
5. Beta Testing Group Program
Customer beta testing is also known as user testing. It is similar to the feedback loop and serves a dual purpose:
- To keep customers invested and engaged in the new feature your company is beta testing
- To provide your business with actionable observations from the customer’s point of view.
Beta testers are an exclusive group. Every customer isn’t asked to give their response or feedback on a new feature. And it is the exclusivity that entices customers to commit to the process for several weeks or months.
However, incentives like gift cards or swag can enhance the deal. Various marketing retention strategy programs work simultaneously to create a fantastic customer experience that nurtures positive sentiment and loyalty and makes customers more willing to purchase products.
What’s Better Than Acquiring One New Customer?
Staff retention concept with employee tied up. You are mistaken if you believe that acquiring two-three new customers is the correct answer. The real answer lies not in acquiring customers but in retaining them. Retaining customers benefit companies in the long term and results in a better ROI.
While a fresh customer adds charm, an existing customer adds value. But which customer retention strategy will keep your current customer base engaged and happy? Fret not. We’ve churned out some of the most helpful client retention strategies that some of the finest brands use to build customer loyalty.
From prioritizing customization to leveraging convenience, we’ll cover some essential traits that any marketing or customer success team can test out today.
Which Customer Retention Strategy is Best for Your Business?
Now, it’s your time to choose. We have shortlisted some of the best customer retention strategies. Every strategy mentioned above will not work for every business. But that doesn’t mean you won’t try. As long as you keep your customer’s needs and wants in mind, they’ll be more than happy to purchase from you every chance they get!
What’s stopping you? Choose the right customer retention strategy and get started!
Customer Retention FAQ's
To retain your old customers, these strategies will help:
- Provide phenomenal customer service
- Build a customer data base
- Target your loyal and valuable customers
- Implement a customer feedback loop
- Offer genuine and unique services
The key to retaining customers is to know when to approach your customers. Ensure you also know what to come to your customers with! It creates a smooth customer experience. Collect data to understand how your customers are engaging with your efforts. It is one of the key solutions to customer retention.
There are multiple strategies for customer retention. It differs from business to business. Some methods of customer retention include:
- Building customer trust and ensuring long-term relationships with them.
- Targeting loyal customers
- Improving business according to customers' suggestions and feedback
The top 3 keys to customer retention are:
- Shared vision and strategy
- Training and communication
- Focus on Adoption