Customer Retention is a collection of all activities used by businesses to retain customers to continue using their products/services. As customers continue to stick with the business, sales and profits will also increase. Customer Retention is not just simple actions, they are considered an important business strategy. This strategy is the whole process from the time customers first contact the business until they buy again later. Strategies to retain old customers are easier to implement by established businesses than new businesses.
Why should we care about Customer Retention?
Increase order closing rate
When a customer has used your products/services more than one time, it means you have built their trust. Therefore, the closing deal for old customers is always much higher than that of new customers who have never contacted the business. However, if your products/services disappoint them, the percentage of closing deals will decrease.
Save a lot of money
If you can make your customers keep coming back to use your products/services again. It will help your business save a lot of money to spend on:
- Costs and resources for calls, product introductions, etc.
- Cost of meeting customers.
- Time and cost to negotiate and sign the contract.
Increase revenue and profit
Leveraging an existing customer base is a simpler way to increase business profits than marketing to new leads. Most importantly, retain the customers you’ve invested time, money, and effort into. This will increase the momentum in the business process of the business.
Opportunity to improve your product
Retaining customers will help businesses improve customer satisfaction with products/services. Businesses will have the opportunity to listen to feedback from customers, thereby knowing where your product/service or business is strong and weak. From there, you can come up with plans and strategies to improve the product.
Tips to build effective Customer Retention strategies
There may have many ways to keep your Customer Retention rate high. But here are the most effective 7 tips that we want to share with you. By mastering these 7 tips, you can be confident to conduct these strategies.
Tip #1: Express your gratitude
Customers are always likely to switch to your competitor’s product instead of staying with your business. Therefore, sending your frank gratitude will help businesses create sympathy for customers. This has the lasting effect of retaining your existing customers. Thanking customers for choosing your brand shows that you value and appreciate their purchases.
Expressing gratitude can be as simple as sending a thank you note or offering rewards such as gifts, special discounts, free products, and special offers. Thanking your customers on social media is also a great way to show that you appreciate them. This could help to increase customer retention.
Tip #2: Always respond to customer feedbacks
Many businesses lose resources when they don’t listen to their customers’ feedbacks. Always prepare a good move to receive customer feedback! Show them how important their contributions are to your business. Don’t just focus on marketing your products and assume it will solve your customer’s problems. Reach out to your customers to find the solution they need, and how you can solve it.
Tip #3: Build loyalty and enthusiasm from your employees
Many business owners forget to treat their employees well. Employee loyalty indeed determines customer retention rates. The happier your employees are with your business, the more likely your customers will get the same rewards. Make sure your employees have the resources they need to do their jobs effectively. At the same time, conduct recognition and praise when they do their job well. When employees receive compliments for a job well done, they are more likely to repeat them.
Tip #4: Share valuable content
Content is an important part of customer retention because it nurtures both new and old customers. Your content should include below recommendations:
- Get your customers off to a great start with your product with tips and tricks
- Attract potential customers by showing them the advantages of your product.
- Update shoppers about new product features and events in your business.
Tip #5: Make a good impression in the first sale to customers
You will never get a chance to make a second first impression. When you provide excellent customer service and make sure the processes consumers go through are as seamless as possible. This helps them remember the image of your business, the first impression will be more positive, thereby increasing the likelihood of returning and recommending your products to family and friends.
Tip #6: Implement loyalty programs for customers
Loyalty programs are also known as customer retention programs because they are used effectively to increase the frequency of purchases. Create these programs to encourage consumers to make multiple purchases in exchange for rewards or discount vouchers. You can do this by instructing them to create loyalty accounts, loyalty cards, etc.
Tip #7: Regular interaction with customers
Keeping in touch and interacting regularly with existing customers as you do with your business partners or dropshipping agent is something you need to keep in mind. An email is an effective tool for marketing and customer retention. Businesses use it to build positive relationships with their customers. Through email, businesses can send special offers, product/service updates, birthday wishes, or greetings to their customers.