Customer Retention Strategies that Actually Work

September 2, 2022

Most businesses make the mistake of focusing on acquiring new customers. They invest in outreach, more marketing, and the savviest software that might boost brand awareness. While efforts for market expansion are always good ideas, one must not overlook the importance of customer retention. In this blog, we’ll take about customer retention, how to calculate it, and our favorite customer retention strategies that actually work.

What is customer retention?

Customer retention is defined as your ability to turn existing customers into repeat buyers. This prevents them from switching to a competitor and ensuring that they stay loyal to your brand.

There’s a simple reason you should invest in customer retention: customer retention is less expensive than acquiring new customers. Additionally, recurring customers improve the chance of your brand getting referred to friends and family. That’s free marketing that operates on its own.

There is nothing fundamentally wrong with working hard to chase new customers. Still, your customer retention rate says a lot about your company’s health. It indicates if the brand's quality is good, if your service is satisfactory, and if you can deliver your customers’ desired outcomes through your products and services.

How to calculate customer retention rate (CRR)

  1.  Identify the number of customers you have by the end of a specific period (whether it is a week, a month, or a quarter).
  2. Subtract the number of new customers you have acquired over the same time.
  3. Divide this number by the total number of customers you had at the beginning of the period.
  4. Multiply the number by 100. This should reveal your CRR.

You might be wondering, what is a “good” customer retention rate? There is no clear answer as of the moment as countless software is available with different interpretations. For most businesses across all industries, the CRR is below 20%. Online businesses and e-Commerce stores have CRR higher than 35%.

Customer Retention Strategies To Try

  1. Invest in customer onboarding

When a customer makes their first purchase, it is the perfect time for a company to establish a strong relationship and a lasting impression. This can be achieved through a strong customer onboarding process.

This is because customers will most likely remember all the struggles and hiccups they experienced at the beginning of their interactions with the company. This may include information mishandling, poor customer service, miscommunication, etc. 

Establish a customer onboarding process through email triggers, follow-ups, knowledge base access, celebratory emails and social media posts that inspire and excite your customers. 

  1. Personalize the customer experience

No two customers are the same; nothing feels worse than being treated as a mere number or sale. Avoid blanket statements and generic messaging as this will not cater to the nuanced differences of every customer.

While you cannot craft a personal message to every customer, it helps to incorporate personalization techniques such as using their first names in emails, applying segmentation, and keeping your offers relevant to their demographic.

  1. Establish trust

This may be easier said than done. There are two essential things to remember: first, never assume that they trust you just because they purchased from your store, and second, trust is difficult to build, and it takes time to establish.

To begin with, 81% of customers base their decisions to purchase on whether or not they feel like the brand is trustworthy. 

  1. Always gather customer feedback

Remember that there is always room for improvement. Make it a point to always ask for ways to improve your product or service accordingly. Additionally, establish a customer feedback loop through forms or surveys. Add incentives such as exclusive promo codes to invite them to respond to you.

After you have gathered the data, analyze the results and check for customer trends. This should allow you to weed out the methods that do not work and focus on those that do.

  1. Launch a customer education program

Free information is one of the best ways to establish reliability and credibility. This further helps with customer retention by improving your reputation. One good example is to send offers and updates through email at your desired frequency. Generate blogs or social media posts full of useful information your customers will appreciate.

These 5 customer retention strategies should help boost your CRR, reduce churn, and eliminate customer defection. Got any more ideas? Comment them below.

To help you more about digital marketing, I need you to check this ebook I've created about the 10 things that I'VE WISHED I had known when I started marketing. If you are or are not in the same place, you must read this. Get the ebook here. 

If you want more up close and personal marketing strategies, advice, or an overhaul of your marketing structure, email us at zack@roimf.com or schedule a call with Zack now.

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