When customer retention rates drop, it’s no surprise to see a decline in profits. Multiple studies conclude that more than half of a company’s sales stem from repeat buyers. Neil Patel writes that the “probability of selling to an existing customer is at least 40 percent more likely than converting someone who has never bought from you before.”
Lowered customer retention rates decrease sales of new products and force companies to spend more on marketing. Both online reputation and customer experience play a substantial role in waning customer retention. However, solutions to boost credibility and entice valuable customers are easy to access and use.
Find the factors behind lost customers.
Use a reliable customer retention formula. Calculate your retention rate, then create SMART goals. With goals and rates in mind, turn your eye to the customer journey and overall customer experience.
Look for holes in service where you could do better and therefore increase customer experience and retention rates. Look for any disconnect or unauthentic messaging. Chatbots don’t help if your target audience is put off by them. The same goes for sites that take five clicks to finalize a purchase. Convenience and experience are essential. Once these holes and solutions are identified, communicate the methodology and goals with your team.
6 solutions to increase customer retention rates.
Focus your attention on successful relationship-building strategies that engage customers, deepen the customer experience, and earn trust. Your ideal customer’s needs are integral at all stages of the buyer’s journey. The more you know about your customer, including why they went to a competitor, the better you can address ongoing problems head-on. Increase your customer retention rates with a focus on customer-centered solutions.
1. Loyalty programs. We know that loyalty programs work. By offering something of real value to your customers, you build trust. In return, loyalty programs increase opportunities to create brand ambassadors and contact with influencers who’ll market your brand with personal testimonials and social proof.
2. Upselling and cross-selling. Stay in contact with your customers and address their pain points by making extra services or products available as an upsell. Use cross-selling to demonstrate additional value by sharing related items.
3. Third-party integrations. The customer experience relies on convenience. If your data shows that you’re losing clients during the process of using a third-party integration, then look for opportunities to link back to your site or use A/B testing to determine if a different landing page would help.
4. Review collection, automation, and response. Lousy customer service turns off potential clients and decreases your customer retention rate. By collecting customer reviews and proactively engaging with your customers online, you increase your visibility and provide opportunities for exceptional customer service. Additionally, with ConsumerAffairs for Brands review collection platform, you are able to ensure that email and review responses are timely with email automation and response alerts.
5. Segmentation. Not all loyal customers are created equal. Use email and loyalty program segmentation to figure out the exact pain points of your genuinely loyal customers. Then personalize your marketing to match this segment.
6. Communicate. From exclusive offers to trending topics, keep your brand at the forefront of your client’s minds by providing valuable resources. With the Harvard Business Review reporting that an increase of “5 percent in customer retention can increase company revenue by 25-95 percent,” tracking your customer retention rate is crucial. Moreover, sales teams that increase customer satisfaction through stellar customer service and pay attention to their online reputation through review collection boost revenue and decrease overall expenses.