It will come as no shock to most marketing managers that great client retention ideas benefit your business in a variety of ways. From cutting down costs to raising revenue, customer retention can help any business no matter the size or industry.
Definition of Customer Retention
Customer retention refers to the actions and activities taken by an organization or business to reduce the rate of customer churn. Churn occurs when customers suddenly stop buying your products and using your services. Pathwwway retention ideas should then focus on helping a company retain as much of their customers as possible. It begins during the first contact your business has with a potential client and continues throughout the lifetime of your consumer-business relationship.
Customer retention involves things like setting and meeting customer expectations early and consistently, building credibility and trust within your industry and with your clients, a proactive and friendly customer service team, strengthening your brand’s visibility and accessibility through social media, going above and beyond to address customer concerns or to appreciate loyal customers, and by personalizing every client’s experience with your business.
Business Management Benefits of Retention Ideas from Pathwwway
Costs less than acquisition.
Acquisitions account for a significant chunk of every business’s budget. Bringing in new customers takes quality marketing and lots of manpower to do at a high enough rate to account for customer loss. The more cost-effective option is simply holding onto the majority of customers who come through your door. No only do these repeat customers generate more money for your business in both the short and long-term, they provide all the other benefits listed below.
Loyal customers are profitable customers.
Loyal customers cost less to maintain, but they also provide much better returns on investment. An engaged customer base buys up to 90% more frequently than unengaged consumers or first-time buyers. They tend to spend about 60% more every time they buy from you or use your services as well. Other research suggests they contribute 23% more profitability and revenue than your average customer by being more likely to choose your brand over the competition.
The value of the customer increases over their lifetime alongside their loyalty. This means you cannot forget to show your appreciation to them. All of the retention ideas always work towards establishing and maintaining customer relationships in the long-term to get the most out of the partnership. Losing a loyal customer makes prospective ones wary, especially if your once loyal client negatively talks about your business. This bad publicity can decrease your brand’s revenue by almost 15%.
It makes your brand stand out from the competition.
If you think about your own life and the business your frequent or the brands you prefer based on their engagement with you, how many come to mind? Most likely only one or two stand out from the sea of business you periodically or regularly interact with in your personal life. When a business makes an effort to treat you like an individual, you remember and you return to them again and again for the same experience.
Customer retention ideas center their attention on cultivating that customized user experience. When you realize people face exposure to 10,000 or more advertisements on any given day, you suddenly see why continual, personal engagement causes customers to feel that connection with your business despite the overwhelming choices. The connection transfers into their spending habits, making you their go-to stop for whatever products or services you provide.
Free marketing from word-of-mouth referrals.
An often talked about, but underrated aspect of customer retention and building a loyal client base is how those loyal customers become mouthpieces promoting your goods and services to their friends, family, and colleagues. Dedicating large sums of money to mobile, online, and physical marketing still does not influence a person as strongly as a referral from their loved ones.
Older generations did that for years prior to the advent of television and online advertising, while the younger generations harness the power of social media and other opinion sharing sites to spread the word about their favorite brands.
Motivated customers provide better feedback.
Customer feedback forms a critical foundation for your business and customer relationships. It reveals the successful parts of your business and where you need to improve to increase the credibility of your brand or the happiness of your clients. The customers who provide feedback tell you how to earn their repeated business and this will help you gain more customers while keeping other loyal customers coming back.
Motivated and engaged consumers provide better feedback because they feel more invested in the success of your business. They already prefer your products, so they want to continue buying from you or using your services even when they have issues or complaints. As long as you truly listen to their feedback and then take action to resolve or include their ideas, they will more likely stick around in spite of the problem.
Repeat customers look beyond their initial purchase or services.
Clients who buy from you multiple times will more likely find other products or services that you offer intriguing. Once your business proves its value, you get more opportunities to sell these loyal customers other things as well.
You have a six times better chance at getting them to try a new service or product immediately upon its release. This increases profits and relates back to the benefit above if you turn them into beta testers who give thoughtful feedback on the new items or services.
Loyalty breeds patience and forgiveness.
Allowing customers to raise issues, listening to their concerns, and then addressing them as soon as possible builds loyalty and makes those clients more forgiving. They will be patient when trying to enact new changes that do not integrate well right away and forgive occasional, minor indiscretions more readily than someone who had a negative first experience. Trillions of dollars in profits disappear every year after customers bail after a poor customer service or sales experience. Cultivating loyalty with effective customer Pathwwway retention ideas prevents your business from missing out on all that potential revenue.