Research shows that it costs five times more to acquire a new customer than to retain one of your current customers. Additionally, when you increase your retention rate by a mere five percent, you can increase your profits from 25% to 95%. So, it’s well worth the time and money you invest in improving customer retention.
Here are some tips to help you boost yours:
Start with Your Current Customer Retention Rate
Before you implement a program to improve your customer retention rate, it pays to have a baseline figure to measure against. Dig into your company’s analytics to determine your current customer churn numbers and customer retention rate. You’ll want to write these down on a spreadsheet to measure these rates at least monthly so that you can compare them to your baseline numbers.
Keep the Lines of Communication Open
It pays to keep in touch with your customers well after the sale. Whether it’s support content that allows them to maximize the value they get from your product to responding to feedback on social media or elsewhere, maintaining a great relationship with your customers without annoying them with too-frequent emails or junk snail-mail is a fantastic way to increase your customer retention numbers.
Segment Your Email List for More Effective Targeting
Sending out helpful information regularly in your newsletter can help you retain your customers. However, an even better idea is to segment your email list by industry or interest so you can send each segment only information that relates to their specific needs. Otherwise, you run the risk of your emails ending up in their spam folder. That’s definitely a no-no for customer retention.
Offer Extra Services
Amazon is a great example of how to please customers by offering extra services. By providing Prime members with free shipping, it has made itself the shopping platform of choice for customers worldwide.
Look for ways to give your customers service that goes well beyond the norm. For example, if you’re a music studio, offer instructional videos that complement your students’ lessons. If you’re a baker, offer an extra roll for every dozen ordered. Or, you could provide customers with a forum where they can learn from each other how to get the most value out of your products. Be sure to interact with your forum participants for maximum value.
Increase Your Customer Retention Rate with Renewal Incentives
If your business involves a subscription service, it pays to offer incentives when it’s time to renew. After all, they’ve stuck with you over time, so reward them with a substantial incentive. Not only will your generosity help you gain their loyalty, but if you also add a reward for recommending your service to their friends and colleagues, you’ll gain even more good vibes.
Increase Your Client Retention Rate by Building Community
Most people love to belong to a tribe of sorts. Whether that’s around a special interest or their love of a brand, there’s something special in belonging.
Building a community on social media is a start in improving your client retention rate, but when you offer promotional swag, such as bumper stickers or T-shirts, they can act as brand ambassadors wherever they go. It’s a win-win for both you and your clients.
Give Clients a Seamless Customer Experience from the Start
Client retention starts well before prospects become clients. Wooing them with email newsletters, informative social media posts, and content that helps them solve tough challenges earns their trust.
Statistics show that these marketing channels deliver more value for companies versus other methods, such as display advertising, paid search, and even SEO:
- Email marketing provides the biggest bang for your marketing buck, beating other methods by 56%.
- Social media marketing produces 37% better results in client retention than other methods.
- Content marketing is 32% more effective at retaining customers than other methods.
After your prospects become clients, sweeten the customer experience with loyalty programs, a robust customer support system, and content that helps your clients get the most out of their purchase. Keep the lines of communication open through mobile messaging (but not enough to annoy them), email newsletters, and social media conversations. Maintaining a healthy relationship through rewards and support programs goes a long way toward improving client retention.
Use Client Retention to Feed Client Acquisition
There’s nothing like an enthusiastic customer to win over new clients. So, when you work on making your existing clients happy, you’re doing more than increasing client retention. You’re creating brand ambassadors.
Encourage your clients to spread the word about your company. Whether by creating promotional refrigerator magnets or promotional stickers or providing them a discount for referrals, do all you can to make the most out of your increased client retention rate by feeding your sales funnel. That way, you’re not only growing your overall number of customers, but you’re building a cadre of loyalty. And that, in turn, increases each customer’s lifetime value.
Finally, Keep an Eye on Your Retention Metrics
Whether you’re a solo entrepreneur or a sophisticated global brand, you need to keep track of your client retention rate. If you see it dip, re-examine your strategy. Here’s an easy way to calculate it.
First, choose the unit of time to measure. Whether you want to measure weekly, monthly, or yearly will probably depend on the type of business you run, the seasonality of your business, and your analytics resources.
Let’s look at how it works on a per-month basis. We promise – it’s not rocket science, just basic algebra.
- Let “S” equal the number of customers at the beginning of the month.
- Let ‘E” equal the numbers at the end of the month.
- Let “N” equal the number of new customers you’ve added during the month.
- Let “X” equal your retention rate.
Simply plug in those numbers into the following equation, and voila! You’ve just found your customer retention rate for the month.
X = ((E – N) / S) * 100
You can even do it on your calculator. Just remember the order of operations you learned back in middle school. Here’s a link to a helpful guide if you need to jog your memory:
Let our team help you retain more customers with promotional materials that enhance customer experience all the way from prospect to brand ambassador. Contact us today!