Remember the days when your biggest problem was acquiring customers? Now, if only you could keep them.
You’ll already know the statistic that it costs 7x more to acquire new customers than to keep existing ones. It’s time for your business to turn that statistic around by implementing customer retention strategies that work.
In this blog, we explore the essential components of an effective customer retention strategy and then share seven customer retention ideas for your business.
Definition: A customer retention strategy is an initiative that enhances the customer experience and encourages customers to stay with your business. This may be repeat purchases, an ongoing subscription, or continued use of your product.
The components of an effective customer retention strategy
An effective customer retention strategy makes your customers want to stay with your brand. The concept is simple, but things get complicated when it comes to learning what drives your customers’ loyalty.
Customer loyalty can be influenced by a variety of different factors, including:
- Value – Receiving something of value for remaining loyal.
- Consistency – Receiving the same service signed up for.
- Customer service – Having a helpful and responsive customer service team.
- Appreciation – Feeling valued as a customer.
- Personalization – Being treated as an individual rather than a number.
- Communication – Feeling kept-in-the-loop and listened to at the same time.
To improve overall customer retention in your business, it’s important to adopt a variety of strategies that cover different drivers.
7 Customer retention strategies
To see these drivers in action, let’s look at seven customer retention strategies that have helped businesses to reduce churn and improve customer loyalty.
1. Exit surveys
Yes, it’s a little strange to talk about customer cancellations in a blog on customer retention, but we do so with good reason. Your canceling customers hold valuable insights on how to reduce churn.
By adding an exit survey into your cancellation workflow, you can ask an unhappy customer why they aren’t staying with your brand and what you could have done to retain them. You can’t get better feedback than that.
Drivers: Communication and appreciation – asking customers for their feedback and listening to their views.
2. Onboarding procedures
If your onboarding process involves sending a confirmation email and a link to your help section, you’re doing it wrong.
By implementing a thorough onboarding process, you ensure that customers know what to expect from you, how to use your product or service for their needs, and who to go to for help.
Speaking of help, it should go without saying that your customer service needs to be outstanding to have any chance of retaining customers.
Drivers: Consistency and value – setting appropriate expectations and delivering product value through knowledge.
3. A customer forum
Humans have an innate need to belong, which is why groups are popular and powerful. You only have to dip into Reddit or Facebook to see how people with common interests gather together, even online.
By creating a customer forum on your support website, Facebook page, or relevant social forum, you can use this group psychology to retain your customers.
Customers have a place to connect over a shared interest (your product), you have a platform for communicating updates, and you both have somewhere to share ideas and listen to each other.
Drivers: Value and communication – satisfying your customers’ need to belong and providing them with a place to share and listen.
4. Communication calendar
A content calendar is great for planning your social, blog, and long-form content, but something’s missing: Your customer communications.
The customer need for engagement doesn’t stop as soon as they cross the purchasing line, and your customer communications shouldn’t either.
Use a communication calendar to plan and schedule regular customer communications, including:
- Newsletters – A monthly newsletter that updates them on the product, introduces the team, and makes customers feel like one of the family.
- Webinars – A quarterly webinar that uses guest or internal speakers to teach your customers something of interest.
- Blogs – A bi-weekly blog that delivers news, knowledge, and tips relevant to your customers.
Drivers: Value, personalization, and communication – delivering knowledge and communicating with customers on a one-to-one level.
5. Loyalty program
It’s an old one because it’s a good one. More than half of customers will join a loyalty program with a company they like, and 60% of loyalty program customers will purchase from you more frequently. What are you waiting for?
Loyalty programs reward customers for their consistent business and give you a quick and effective way to identify engaged customers versus those that you need to work a little harder with.
Loyalty programs don’t have to be complex either. You can begin with a simple points program where customers accrue points to spend on future purchases.
Drivers: Value and appreciation – showing customers that you care about their loyalty by rewarding their custom.
6. Feedback surveys
Have you ever been told that “you didn’t know because you didn’t ask”? It’s almost impossible to know when a customer is losing interest in your business when you don’t check in once in a while.
A simple customer feedback survey via email or over the phone shows your customers that you care about their feedback, while giving you insights on what customers like (or don’t) about your products or services. You can then make quick fixes that stop someone from leaving you and turns them into your biggest ambassador.
Drivers: Customer service and communication – overcoming customer problems by seeking and listening to feedback.
7. Special occasion emails
Surprise brings humans pleasure. Whether it’s a lottery win, an unexpected bunch of flowers, or an email from a company showing a little love and appreciation.
You can use your CRM system to send personalized emails to customers on their birthday, joining anniversary, or just because. These emails can contain a custom offer or just a happy message from your team.
Drivers: Appreciation and personalization – connecting with customers on a personal level just by being thoughtful.
But don’t forget…
Customer retention strategies aren’t a one-time initiative. They require ongoing effort to perfect and then to retain your customers now and into the future.
If you want to keep your customers, you need to work for it.