Customer retention is more vital to your success than you might think. But why? Read on.
- You Save Big: Research conducted by Frederick Reichheld of Bain & Company suggests that due to “The Loyalty Effect,” investing in current satisfied customers is more cost-effective than acquiring new ones.
- Increased Revenue: Research by Frederick Reichheld also indicates that increasing customer retention rates by 5% can increase profits by 25% – 95%.
- Word of Mouth: According to a Nielsen study, 92% of consumers trust recommendations from friends and family over any other form of advertising.
- Repeat business: According to Zippia, almost 65% of a customer’s business is from repeat customers.
So if customer retention is so important, how do I approach it?
Provide Outstanding Service
The most powerful way to improve customer retention is through outstanding customer service. This means addressing issues quickly, with empathy, and ensuring customers feel heard and understood. Happy customers are loyal customers.
Make it Personal
Tailor your communications, offers, and recommendations based on individual customer data – preferences and behaviors. Customers remember businesses that seem to care the most and cater to their specific needs.
Create Incentives
Whether a simple discount, special offer, gift or loyalty program, incentives are a proven way to retain customers because they improve customer relations and give them something valuable in exchange for their loyalty. But wait, there’s more.
Customer Feedback
Simple yet effective. Use surveys and feedback forms to understand your customers’ needs and preferences (Plus, this’ll help you discover where to improve).