Customer retention is the aspect of retaining customers in an organisation. Some key customer retention strategies are offering personalised services, building trust etc.
Finding it difficult to retain customers? Customers are one of the most crucial aspects of a business. In the early stages, businesses usually focus on customer acquisition, and that’s one of the prime reasons for massive spending by budding startups. However, while you should always strive for customer acquisition, retaining the customers is equally, if not more important. This is customer retention.
Customer retention is vital for your business – not only to survive and grow but also to create a brand and generate goodwill. Earning customer loyalty is a challenge in today’s market. But before knowing how you can earn customer loyalty, increasing your customer retention rate is important. For that, it’s crucial to understand what customer retention is. Let’s find out!
What is Customer Retention?
As the name suggests, customer retention is the facet of retaining your customers such that they become loyal to you. However, customer retention is more than just keeping and maintaining the customers. It is a metric that shows customer satisfaction, customer engagement, repurchase behaviour, trust in the brand, and the emotional connection with your brand. In short, customer retention depicts the entire customer relationship with your organisation.
How Does Customer Retention Work?
Customer retention begins from the first purchase by a customer and covers all the subsequent interactions with the customer. Brands use this analysis to determine customer experience and success in delivering optimal customer experience. This study, conducted over time, will help you decide whether or not you are on the right track towards engaging and building trust among your customers and delivering up to their expectations.
Why Is Customer Retention Critical for Businesses?
In today’s cut-throat competition, believe us, you cannot afford to lose customers. Losing customers reduces revenue generation, increases customer acquisition costs, making your competitors stronger in terms of customer base and revenue. Therefore, you should always strive to increase customer retention.
Customer Retention Strategies
To increase customer retention, organisations deliberately build strategies to keep their customers happy and satisfied. Following are some of the key customer retention strategies that you can employ:
- Offering Personalised Services: Customers want to feel special. You can fulfil your customer’s expectations by providing personalised customer services. The action shows customers that you care for them. Such businesses can also use purchasing behaviour data to understand the customer’s buying preferences. This will allow companies to target customer needs and preferences directly.
- Building Trust: You need to build trust among your customers to retain them. This is possible if the company continuously delivers better quality products, customer services and consumer experience.
- Using Social Media: Social media is one of the most powerful tools. With the help of social media, you can engage with customers directly and work to understand their needs and engage them further. Even floating a survey form can help you know a lot more about the customer’s preferences.
- Get Customer Feedback: Customer feedback is important for you to understand their position and areas where they can improve. Customer feedback is the mirror that you can use to identify the gap and brainstorm how they can improve and deliver superior customer satisfaction.
- Improving Support Services: The process of buying and selling does not end with delivering the product. After-sales support is one of the key drivers to determining whether the customer will continue to be loyal or walk away. You should therefore strive to improve support services to increase your customer retention rate further.
In a Nutshell
Customer focus is the key. Customer retention is as necessary as customer acquisition. By implementing the above tactics, you can successfully retain your customers and stand out from the competition. You can boost customer retention rates by focusing on little aspects to deliver convenience to existing customers.
For instance, streamlining the payment system can help you deliver convenience to the customers in terms of payments. This is especially true for online businesses. The PayU payment gateway has been providing a seamless checkout experience to the customers when it comes to payment. With the best payment success rates and acceptance of international currencies, you can deliver the best payment experience to your customers.
Frequently Asked Questions
The formula for calculating customer retention rate is:
(No. of customers at the end of the period – New customers added) / No. of customers at the start of the period * 100
Organisations can determine the purchasing pattern of customers with the help of customer data. This enables a better understanding of customer choices and preferences, thus helping deliver personalised services.
Customer acquisition is more expensive than customer retention. This is one of the prime reasons businesses should focus on customer retention as much as they focus on customer acquisition.