How to Become a Black Belt Master of Customer Retention

Did you know that 61% of consumers will go to a competitor if they end a business relationship with you?

On average, the value of a lost customer is $243 while just a 5% increase in customer retention can grow profits by up to 75%.

These figures are quite telling of the impact a lost customer can have on the growth and profitability of your business. Yet, many businesses are so acquisition-focused that they overlook the vitally important need to keep customers.

If your business is leaking customers or you are looking for better ways to retain your customers, read along for tips from the top brands on how to master the art of customer retention.

Become a master of customer analysis and tracking

To retain customers, you need to first find out existing or potential areas where you are losing customers. Analysis and tracking of customer behaviour lets you determine why customers might want to leave or are actually leaving.

Generally, there are three reasons why customers could leave your business: service, product and price.

Analytics, using systems such as A/B testing and surveys, can help you determine how your customers are interacting with the product and how they perceive the product’s quality, how they perceive the customer service, and the price.

Use the analytics data to improve the price, service or product issues that may be losing you customers.

Keep in touch with your customers even after the sale

A major mistake that can lose you customers is to stop communicating with them after their initial purchase.

80% of business comes from the 20% of existing customers. This means that every customer you lose through lack of sustained communication contributes to 80% of business losses.

Keeping in touch with your customers even after they purchase a product makes it much easier to provide an exceptional service and to continue to keep your brand visible, front and centre. Customers also feel valued when they regularly hear from their favourite brand, and obviously won’t feel as valued if you only contact them when they are being asked to buy something.

Sustain your communication with customers through email, sending thank you notes and gifts, social media and any other relevant channels of communication. Keeping your customers in the loop will ensure that they do not walk out to your competitors.

Set up a complaints management system

Customer Relationship Management software can be helpful in tracking customer complaints and responding to these in a timely way.

You do not require any complex software or systems to keep track of customer complaints; even a basic system would be helpful in retaining customers.

At any given time, customers will opt to walk away from your business than be bothered to complain. But when you give them an effective way to channel their complaints, you will be positioned to quickly respond to these complaints, fix the relevant issues and keep your customers happy.

Here’s a quick fact: 68% of customers stop buying from a brand because of the way they are treated. In an age of social media, it has become so easy for businesses to lose not just the aggrieved customer but also other customers who may be offended by how the business treats one of its customers.

Develop an engaging content strategy

Customers want more than just product adverts; they also enjoy consuming engaging content from their favourite brands. It is no wonder that some of the most successful brands such as Coca Cola invest heavily in content creation—this has played a tremendous role in helping them retain their customers.

Great content is important in nurturing leads, in keeping your brand relevant and in bringing your customers back even after they purchase. Remember, you want to constantly engage your customers and provide superb value to them.

Use diverse channels and content types including blog posts, videos, images, emails social media posts, e-books etc. depending on your customer’s attributes and needs, to share valuable content.

Offer differentiated service based on customer value

To get the most from customer retention efforts,  many companies differentiate their customers based on their lifetime value to their business. All customers are important, but companies have realised that their profits will usually be greater if they focus their retention efforts on those who spend more.

Differentiating your customers allows you to pursue different retention strategies for different customer segments. For example, the emails you send out to the customers who spend the most may be starkly different from the communication you have with customers who do not spend as much.

Incentivize existing customers

Customers love discounts, promotions and freebies, whether they typically spend more or less on your business. Giving customers the opportunity to make significant savings or receive immense value for their money is a great way of keeping them engaged with your business.

Don’t just incentivize prospective or new customers with lucrative deals and discounts—do the same with older existing customers who have been with you for a while.

Customer Retention

It takes more effort and money to acquire customers than it does to retain them, yet most businesses do not pay attention to customer retention. Perhaps the most effective way to keep your customers is to prevent the attrition in the first place by tracking customer behaviour and understanding their pain-points so you can provide effective solutions that they will appreciate and want to stay around for.