Smart, modern business owners appreciate the massive influence customer retention marketing has over their client base and profits. Do not be left behind your competitors because you or your marketing team do not know where to focus your business’s energy. Learn more about turnover below along with helpful advice from the experts at Pathwwway.
What is turnover?
Turnover refers to how quickly a business sells its inventory and how fast the business’s accounts receivable department collects money. It is more commonly known as your total income received, or your gross income. An investment company’s turnover is represented by the percentage of a specific portfolio sold within a set amount of time, a month or a year. A service company’s turnover would be represented by the number of services provided in a particular amount of time, and so on and so forth. The faster the turnover rate, the more revenue produced during that time period.
How to Determine your Business’s Turnover Rate
How you keep track of your business’s turnover rate depends on your industry and what kind of products or services you provide. Knowing your turnover rate can help you judge whether your customer retention marketing strategy is succeeding or not. Take for example a business that sells goods. The two largest assets owned by that company can be found in their inventory and in the accounts receivable department. You invest in the inventory to sell and the accounts receivable department represents the amount of money earned from those inventory investments.
To find a simple numerical value that represents your turnover, you must first decide on a time frame to analyze. Most businesses choose a year, whether it is their fiscal year, the tax year, or the calendar year. Once you decide, begin collating and adding up the volume of sales, also known as the total number of products sold during that period. (You could do the same thing with services provided.)
Then review your business’s financial records and figure out the average price of the items you sold during that time. You could calculate them all individually if you have the time, but an average will still give you a good idea. Now, to calculate the turnover rate, simply multiply the number of items sold, or services provided, by the average price of the products sold. Now you have your turnover rate, e.g. your gross income, for the year and you can use the data to evaluate the effectiveness of your customer retention marketing plan.
Managing and Increasing Turnover with Pathwwway Customer Retention Marketing
Client retention marketing makes the difference between a successful company that grows exponentially over the long-term versus one that burns bright quickly, but dies out just as fast. Loyal clients who shop with you again and again have higher customer lifetime value than one-time or occasional shoppers. This means more revenue over time without wasting money on fruitless acquisitions. You can increase your turnover rate by artfully managing your customer retention marketing program in the ways Pathwwway recommends below.
Keep Your Customers Engaged and Happy
If you keep your client happy and engaged, they continue buying from you. It’s as simple as that and makes a gigantic difference in your customer retention marketing plan. How do you know when clients are happy? By tracking customer satisfaction with net promoter score and other surveys. Attach the survey to an email, or make it appear as a pop-up after a recent purchase. Either way, be sure to ask only one or two questions meant to give you valuable insight into the happiness of your customers.
A good example is “How likely are you to recommend our products or services to a friend or colleague?” coupled with “What is the biggest reason you chose that score?” The first question reveals how many customers are promoting your business already. The second question tells you why and opens your eyes to what avenues you could take to boost customer satisfaction.
A survey gives customers with concerns or complaints a way to communicate those to you without having to make the effort themselves. Send proactive customer support communications, like emails or letters, to customers who pull back from your goods or services to find out what is going on. Chances are, if there is an issue, they will feel more confident that you recognized an issue forming and chose to address it head on.
Reduce the Amount of Effort Expended by Your Customers
Customers do not want to make a lot of effort to buy your products or use your services. Streamlining the signup process or your purchase methods encourage customers to stick around. Difficulties signing up for software products is a clear example of how poor onboarding causes huge customer loss and decreases your turnover rate. Optimize your onboarding by creating a natural flow when customers first use your product that shows them what to do next and why.
Another customer retention marketing strategy business owners neglect even when it stares them right in the face is the ability for clients to easily contact you or your management team. If a customer has a question or concern, they do not want to jump through hoops to get it addressed. Do not make the problem worse by forcing them to figure out how to contact you by themselves. Include support widgets or clearly written instructions on how to contact you in a visible and accessible place on your website.
Provide the Best Customer Service in Your Industry
Customers want to know they matter more to your business than just as a means to make a profit. Demonstrating empathy when acknowledging a client’s concerns can change their response to it and helps to build a better customer relationship. Even showing interest in why and how the customer uses your products or services can turn them from one-time buyers into loyal clients.
Pick a set of phrases that prove the feeling of empathy to your customers and share them with your employees from top to bottom. Have them incorporate these phrases into every client interaction without sounding staged or fake. Hopefully, your employees truly believe the words or phrases, which becomes evident when they speak to customers. Give your customer care representatives essential phrases to help de-escalate situations and keep your customers happy. Things like, “I’m not sure, but I can’t find out,” or I’ll send you an update by [specific date or time].”