9 techniques to retain customers and increase your sales
Are you wondering what " customer retention" is and how it can benefit you?
Based on the customer relationship, the retention and subsequent loyalty of buyers is the most profitable commercial strategy for your company.
Do you want to know why and how to retain your customers? Read on, then, we have the answer! ✅
What does customer retention mean?
Customer retention means
Customer retention is a marketing and sales strategy. It consists of trying to retain those people who have purchased a product or service from the company. Also, it pursues to increase the purchase frequency of buyers from a value proposition that converts them into loyal customers.
What is the objective of customer retention? To increase the customer lifecycle.
☝️ To achieve customer retention and, therefore, customer satisfaction, two factors are necessary:
- A good customer service (or an amazing customer experience ).
- A quality solution.
There is a 60% to 70% chance that a satisfied customer will buy from you again. In contrast, you have less than a 20% chance of selling to a customer who doesn't know you.
Invesp Consulting
Importance of customer retention
Have you ever wondered how much it costs to retain a customer? Of course, it costs much less than acquiring new customers.
In addition, the return on investment is much more attractive. According to Moneder, for a 5% investment in retention, you can get up to 95% profit.
Hence the importance of investing in a retention strategy and not only in acquisition.
A new customer is 7 times more expensive than building customer loyalty.
Moneder
Difference between maintaining and retaining customers
Maintaining or building customer loyalty is not the same as retaining customers. Although both concepts focus on retaining a customer:
- Retaining existing customers is the first objective after the purchase (repeat purchase).
- Once you have succeeded in retaining them, the next objective will be to build loyalty (to keep them trusting you over the years).
Customer retention and customer recovery are not the same thing. Recovery means trying to win back a potential customer who:
- Has at some point purchased (perhaps more than once),
- but has been dormant for some time and, therefore, is not generating revenue.
How do you retain a customer?
We're not going to say that customer retention is an easy task, but you do have a lot going for you. That's because you can influence customer satisfaction through a customer retention strategy and a loyalty strategy that puts the customer at the center of your actions.
👉 Ask yourself: what are their wants and needs? The idea is to create a satisfying customer experience, and to do that, you need to get to know them.
🎯 Let's look at some techniques to retain customers and increase their loyalty. Don't stick to just one, combine them and play with them to increase your audience engagement.
1. Know the customer journey
The customer journey is the key to a customer-focused strategy.
The customer goes through different phases from the moment he/she meets you until he/she becomes an ambassador of your brand (if he/she is very satisfied):
- Awareness phase.
- Consideration phase.
- Decision phase.
- Loyalty phase.
- Recommendation phase.
You must know how the customer behaves in each of the phases in order to approach him correctly. The way you interact with the consumer in each of them is important to get a positive response at the end of the journey.
👉 Remember, your attitude influences their satisfaction. So: even if he hasn't bought you must focus on the customer if you intend to build customer loyalty!
2. Add value
It is not enough to interact with the customer, your actions must provide value and create a good customer experience. This is the only way to make a difference in the face of so much competition!
🎯 The goal is to become unique, so that the customer finds something in you that he can't find in anyone else.
👉 Beyond your product or service, focus on creating a community:
- That unites your customers with your brand,
- through which you can spread your strategy and offer information.
To achieve this, you can focus on creating quality content for your followers. Be careful, this content must be related to your sector of activity or company.
But always keep in mind that the customer expects to find a profit in your company. Therefore, tell him about the benefit he gets from your product or service, not its features. Tell him why he needs it.
95% of customers expect companies to communicate proactively, not reactively.
Lealtad360
3. Opt for multichannel communication
Good communication is not effective if it is not transmitted through the right channels:
- Social networks,
- website,
- email,
- phone, etc.
🎯 Opt for a constant multichannel communication adapted to the different market niches.
👉 Pay special attention to social networks. They are a fast, direct and effective communication channel that helps build relationships with customers. They will always carry you in their pocket!
☝ ️ When we talk about communicating, we also mean the image your brand conveys, not just the actions you can plan. So take care of your brand image and try to make it represent your corporate philosophy and values in all your channels.
4. Opt for personalization
It is also clear that, for the customer to feel identified with your brand, you must speak directly to him. In other words, they should feel that they are talking to a friend who knows them perfectly, remembers their birthday and makes them feel unique. And you care about him!
81% of consumers make purchasing decisions based on how much they trust the brand.
Edelman
👉 In that sense, personalize both your messages and your offers. Not all customers are the same!
🎯 Create customer segments or subgroups based on their personal characteristics and consumption habits. And then plan actions tailored to each audience.
☝️ It is important to detect those groups that bring you the most business volume and focus on them. Studies show that it is usually a small portion of your customers who generate the most profit.
Increasing customer retention by 5% results in a minimum 25% increase in profits.
Bain & Company
5. Boost your customer service
Customer service is key to customer loyalty. Whether before or after the purchase, the consumer needs to feel supported, whether it's for the choice of the right product, the selection of the right product, the purchase of the right product or the purchase of the right product:
- Choosing the right product,
- solving problems, if they arise.
The best way to ensure good customer service is through CRM ( Customer Relationship Management) software. This loyalty tool is designed to manage customer relationships across all company channels. Among other things, it centralizes exchanges and makes interaction easier. In addition, it records all contacts, making it easy to access their history of queries and to follow up requests or problems.
93% of customers are likely to buy again from companies with excellent customer service.
HubSpot
6. Involve the customer
The customer has a lot to say. After all, your solution must satisfy their needs and desires. So, you need to talk to them to find out what they want and make them feel part of the solution.
🎯 Drive actions to get to know your buyer persona better:
- Marketing campaigns (email marketing, for example),
- surveys,
- market research, etc.
👉 But also listen to them indirectly. Analyze how he behaves on social networks, for example.
7. Reward loyalty
Another way to extend customer loyalty is precisely by rewarding their loyalty.
💎 If you have recurring customers, convinced of the value of your product or service, don't let them escape, they are a treasure!
🎯 In this case, the best way to show them that you care about them and, of course, to satisfy them, is by exhibiting preferential treatment through loyalty programs:
- Send them a small gift for their birthday,
- offer them exclusive discounts,
- invite them to unique events,
- entice them with a private sale for them.
There are many ways to thank them for their purchase and loyalty!
Repeat customers spend an average of 33% more per order than other customers.
Bain & Company
8. Maintain quality
It seems obvious, but it is worth remembering. A good customer experience depends, above all, on a quality product or service.
You can focus your experience on the customer and be very nice; but if in the end your solution does not meet the customer's expectations, unfortunately, he will abandon you for another one that does.
🎯 So, work on an experience that includes a good product and a surprising and satisfying adventure.
9. Be honest
Last but not least, be honest with your audience. Don't try to deceive yourself and be transparent in all your actions. It is key for them to trust you.
👉 Show him that you won't cheat him in your favor, that your goal is to satisfy him.
🎯 If you make a mistake, apologize. Everyone can make wrong decisions, the crux of the matter is how you handle mistakes. Acknowledging them is a sign of honesty, regret and a thirst for improvement. It does not damage your image but rather reinforces it.
37% of consumers would like companies to apologize when service does not meet expectations.
CallMiner
Customer Retention Rate
If you are interested in retaining customers, you will also be interested in knowing the Customer Retention Rate that your strategies achieve. You can find this out through a simple calculation.
☝️ This KPI ( Key Performance Indicator) shows customer loyalty (and satisfaction). It is also important to know if your strategy is working or not.
How to calculate the customer retention rate?
The retention rate is calculated taking into account a specific period of time. You are the one who chooses it and it can be: monthly, quarterly, half-yearly, yearly, etc.
Once you have chosen the periodicity, it will be enough to make a simple calculation.
Let's look at the formula for the customer retention rate:
| Client retention rate = | [(No. of clients at the end of the period - No. of new clients during the period) / No. of clients at the beginning of the period] x 100 |
💡 In contrast, there is the churn rate, a percentage that measures the loss of customers. This is also based on a given period of time.
🎯 Although the calculation itself is not too complicated, there are customer management tools that can perform the calculation automatically through the data entered on a daily basis. Forget, then, about wasting time on small tasks and focus on creating and optimizing your strategies. You will be able to see the evolution of the rate and will always have it up to date!
How to interpret the Customer Retention Rate?
As we have seen, the Customer Retention Rate is evidence of the customer retention capacity of a brand or company.
Roughly speaking, there are two possible results:
- A high rate: it means that your customers are loyal and tend to repeat purchases.
- A low rate: means that your customers are not loyal and, therefore, are not likely to buy from you again.
In that sense, the higher your rate, the better.
How to increase your customer retention rate?
Improving customer retention is possible if you put into practice the 9 techniques we present in this article.
🎯 A pply them throughout the customer journey. A good strategy starts before the first contact and ends after the purchase.
💙 As in any relationship, the key to success is that your customers are satisfied, content and happy to have you by their side. Do you think yours are?
Article translated from Spanish