3 Strategies To Boost Your Customer Retention Rate

Customers are the life of every business. Without customers who use your product/service, your business would not be profitable. This is why customer acquisition is key.

Customer acquisition is the process of acquiring new customers to use your product or service. The more customers or users your business has, the more profit you make.

While this is good, what happens after those customers make their first purchase? Do they leave, never to return? Or, do they stay and become loyal customers of your brand? The latter option, which is known as customer retention, is just as important as customer acquisition and is more profitable for your business in the long run.

What is Customer Retention?

Customer Retention is the process of ensuring that your existing customers do business with your brand, repeatedly. It involves developing your relationship with your current customers in order to increase their loyalty to your brand. Essentially, customer retention turns a new customer from a "one-time" customer to a lifetime customer.

Benefits of Customer Retention

1. You save money:

Customer retention is more cost-effective than acquiring new customers. Research by Harvard Business Review shows that acquiring a new customer is between 5 to 25 times more expensive than retaining your existing customer. Asides from this, it is easier to win the trust of an existing customer than that of a new customer.

2. You make more sales and profit:

According to research, 68% of a brand's sales comes from its existing customer base. Existing customers are more likely to buy new products that your brand might launch; this will increase your sales and your profits in the long run. In addition to this, data by Harvard Business Review shows that a simple 5% increase in retention rates can grow your profits by 25 to 95%.

3. You get free referrals:

Customers who are loyal to your brand will not only do business with your brand repeatedly but will also recommend your brand to their friends, colleagues and family.

Now that the benefits of customer retention are clear, here are 3 strategies you can use to increase your brand's customer retention rates:

3 Strategies To Boost Your Customer Retention Rate

1. Develop excellent customer service:

Customers who experience good customer service in their interactions with your brand are more likely to remain loyal to your brand.

77 percent of customers surveyed in a 2021 Customer Experience Trend Report stated that they are more loyal to a company that offers a good customer experience when they (the customers) have an issue. In addition to this, 72 percent are willing to spend more with a company that offers customers a good experience.

Delivering excellent customer service to your customers starts from their first interaction with your brand. Personalize your customer's first and subsequent interactions with your brand, solve their issues quickly and effectively, and as much as possible, implement feedback from your customers to improve their experience with your brand.

2. Reward Loyal Customers:

A customer who does not feel valued by your brand, only needs one "bad experience" with your brand, or a better experience with a competitor to move to another brand. It is important to show your customers that you appreciate them.

When you reward your customers, they have an incentive to remain loyal to your brand. Rewards such as discount codes, special offers, or gift packages such as branded merch are a great way to keep your customers loyal to your brand.

With gift packages such as branded merch, your customers will not only remain loyal to your brand, but they will advertise your brand by taking your merch wherever they go.

3. Listen to your customers:

To successfully retain your customers, you have to develop long-term relationships with them. This involves listening to your customers and implementing their feedback about your brand. Customers are more likely to remain loyal to a brand that is aware of what matters to them.

When you show your customers that you care about them, you build their trust in your brand and turn them into lifetime customers of your brand.

Conclusion

With the right Customer Retention strategy, you can ensure a steady stream of revenue and avoid losing your customers to your competition. More importantly, with these customer retention strategies, you can turn a "one time" customer into a loyal fan of your brand for life.