Are you more focused on acquiring new customers or retaining existing ones? It’s tempting to focus most of your energy on acquiring new customers. After all, that’s how you grow your business, right? Well, it’s a little more complicated than that. Customer retention is a key revenue driver that too many companies ignore.
To drive home the importance of customer retention strategies, consider the following statistics:
- You will spend five times more to acquire a new customer than to retain an existing customer.
- Existing customers spend 67% more on your products and services than newly acquired customers.
- Increasing customer retention rates by a mere 5% will increase your company’s profits by anywhere from 25% to 95%.
With so much riding on customer retention, it’s critically important that your company develops a formal customer retention strategy. By incorporating customer retention best practices into your strategy, you’ll increase customer retention rates dramatically.
Below, we’ll cover the ten most important customer retention strategies that will help you maintain a competitive edge in your respective market.
1. Deliver a robust onboarding program
Too often, companies seal a deal with a new customer and are elated by the win. They celebrate the acquisition of a new customer and immediately turn their attention back to acquiring another one. That’s a big mistake.
When you acquire a new customer, you have a unique opportunity to engage them and ensure their satisfaction from day one. If they sign the contract and you leave them to fend for themselves, you’re doing yourself a huge disfavor.
It’s important that you engage new customers from the start and the best way to do that is to deliver a robust onboarding program. This is your chance to train them on how to successfully use your product, so they can generate the maximum return on their investment.
Make sure you understand their unique use case and tailor their onboarding program to meet their distinct needs. Ensure they understand everything necessary to use your product successfully. This will guarantee they are fully equipped to leverage your product to the fullest of its potential. Learn how a robust onboarding program should function.
2. Implement customer surveys
Online customer surveys are key to understanding where your customers are struggling and how you can improve the customer experience. Don’t assume that you know your customers’ challenges and pain points. You’re not a fly on the wall constantly observing their use of your product. There’s no way you can accurately know what obstacles they face without proactively asking them.
Use customer surveys to gain insights into where you could improve to empower your customers to work smarter and more effectively with your product. As Bill Gates says, “Your most unhappy customers are your greatest source of learning.” This is sage advice. By asking customers where you could improve, you gain valuable insights into where you’re falling short in your service to them.
So, routinely (at least once per year) conduct a customer survey to let your customer base voice their concerns. This helps customers feel that their voices are being heard, which builds brand loyalty and increases customer retention.
Pro tip: Once you conduct your survey and identify areas for improvement, be sure to implement changes to improve in those areas. Then, tell your customers about it. Send one-off emails sharing the results of your survey and laying out the changes you plan to make based on their feedback. This will show customers that you truly care about their needs and are taking proactive measures to address them.
3. Reach out regularly to every customer
One highly-effective customer retention strategy is to form close personal relationships with your customers by routinely reaching out to check in.
Set up a process in which at least one person from the company reaches out to each customer at set time intervals—it’s recommended to reach out once per quarter, at a minimum.
This outreach can be conducted by an account manager, the customer success or support team, or even an executive for at-risk clients. It’s a simple call that will last just a few minutes. Call, see how things are going, ask if they need anything they don’t already have, and inquire as to what you could be doing differently to deliver a better experience.
This may sound tedious, but it’s just a quick call that will only take a few minutes out of your day. The result is that you’re showing your customers that you truly care about their experience and are willing to do whatever it takes to better serve them.
The rewards you’ll reap in the form of customer loyalty, increased customer engagement, and higher customer retention rates will be worth far more than the five minutes it takes to call your customer.
4. Form a customer advisory board
A customer advisory board (CAB) is a select group of representatives from your most important customers. You meet with them periodically—once per month or quarter—to discuss your product and their experience using it. It’s an open forum for them to voice their concerns as well as their satisfaction.
The dialogue that takes place in these meetings should drive future product updates. It also provides you with valuable insight into the minds of your customer base. Plus, it allows CAB members to form a community amongst themselves, so they can help one another in the future.
If your customers are local, you can hold these meetings in person at your office. If you have customers in various geographical locations, you can hold these meetings via video conference.
Pro tip: Make a point to share the key takeaways you receive from these meetings with your entire customer base. After each CAB meeting, draft an email to all customers informing them about those takeaways and outline changes you plan to make based on their feedback. As a bonus, provide a way for the rest of your customers to provide feedback on your plan. This will get your entire customer base involved, not just CAB members. And when you implement those changes, communicate them to your customers. It will make them feel that you value their opinions, which builds trust, and boosts customer retention.
5. Provide world-class customer service
Did you know that eight out of ten consumers are willing to pay more for a product or service if they receive a world-class customer experience? Customer service is at the heart of the customer experience.
When customers need support, they don’t want to wait days for a resolution to their issue. 77% of consumers say that valuing their time is the single most important thing a company can do to deliver excellent customer service. So how do you accomplish this?
- Provide multiple channels for customers to submit help desk tickets, including phone, email, live chat, and social media.
- Increase first contact resolution (FCR) rate. FCR refers to resolving customer support issues on the first attempt without having to escalate the ticket and get back to the customer. You can easily accomplish this through the use of dedicated help desk groups. Learn more about dedicated help desk groups.
6. Incorporate that personal touch
With so much data stored in your customer relationship management (CRM) system, it’s easy to personalize every interaction that you and your colleagues have with customers. Before you speak to a customer, you can open their contact record and view every interaction they have had with your company in the past, including pain points, products purchased, interests, etc.
If your CRM includes a 360-degree contact view, this is easier than ever. Personalizing your interactions helps customers feel comfortable and allows you to form closer, warmer relationships with them. They will see you as their partner rather than a faceless entity that sends them an invoice every month.
Treating customers in a personalized way and sending the message that your relationship with them is a partnership will build brand loyalty and do wonders for customer retention rates.
7. Use service level agreements to set expectations
Service level agreements (SLAs) are simple contracts that define the service you commit to provide to your customers. They stipulate the basic terms and conditions of your partnership with them, such as the maximum amount of time a customer has to wait for a resolution to a support ticket.
SLAs give customers peace of mind because they know what to expect. Plus, you have committed to meet those expectations, which makes them feel more comfortable doing business with you.
SLAs also benefit your business because they lend accountability to your operating processes. If a team member is breaking SLAs, you will know because your CRM solution can track SLAs and their outcomes. This provides insight into who needs to improve their performance and who is consistently meeting expectations. Learn more about how to leverage SLAs.
8. Get active in the community
You have probably heard the term corporate social responsibility (CSR). CSR refers to the efforts your company makes to give back to the community it serves. Today’s consumers increasingly consider a company’s CSR activities when making a purchase decision.
Consumers are becoming more socially conscious. Maintaining a positive CSR presence does wonders for a company’s reputation. That’s why Fortune Global 500 companies shell out around $20 billion (US) each year on CSR activities. They realize the importance of maintaining a reputation as a company that cares about more than just revenue.
CSR programs are easy to develop and coordinate. You can organize employee volunteer events at local nonprofits. You can create a matching gifts program in which your company matches employees’ donations to charities. Or, your company can make annual donations to a nonprofit of your choice.
Pro tip: Always measure the results of your CSR efforts and share them with your customers. If your customers realize that you regularly donate to or support social and environmental causes, they’ll see you as a company that cares about their community and works hard to support it. That will win you loads of points and respect from your customers, which will directly affect customer retention rates.
9. Keep customers updated on new developments
When you treat your customers like partners rather than revenue generators, they feel like they are part of your team. As such, it’s important to keep them constantly informed about new developments at your company because those new developments affect customers directly.
Send periodic email newsletters to share new developments and keep customers in the loop. Whether it’s a change in executive leadership, the development of new products, upcoming product updates, or new partnerships you have with other companies, your customers will want to hear about it.
Pro tip: Always include a way for customers to submit feedback on these new developments. This helps them feel included in your business and its forward-looking strategy. The more customers feel included and that their opinions are valued, the more loyal they will be. Loyal customers stick around longer, reducing customer churn and increasing customer retention rates.
10. Continually develop educational resources to ensure customers’ success
Educating your customers doesn’t end with their onboarding program. As your product evolves and new market trends emerge, customers need to stay up to date on these things so that they can remain competitive.
Publishing blog articles on a regular basis helps to continually educate customers on emerging trends.
Also, developing how-to guides and free training videos, then sending them to your customers, helps to continue their education and ensures they are always able to use your product successfully.
Finally, developing a knowledge base to house these educational resources is a great tactic to ensure customers can easily find answers to common questions, which furthers their education.
Support your customers by consistently creating new educational resources and updating existing ones. This will improve their ability to use your product like a pro, which will increase customer satisfaction levels and, in turn, boost customer retention rates.
The key to generating high levels of customer retention is maintaining a keen focus on your customers and their needs. Empathize with your customers. Put yourself in their shoes. What would you want from a company to convince you to stick with them over the long haul?
Ask for their feedback and implement changes based on it. Include them in the development and strategy around future product updates. Reach out to them regularly to see how they are going.
The bottom line is that you need to treat customers like partners and reassure them that you’re taking their opinions and suggestions seriously. Communicate to them that you’re making changes based on their needs. Make sure they know that you’re both in this together and that their success is your success.
Cater to every one of their needs, treat them with respect, personalize your relationships with them, and they will feel valued and become increasingly loyal to your brand. All that adds up to increased customer retention rates, which translates to a reliable, recurring revenue flow.
Do you have a customer retention strategy that works well for your business? Share it with us in the comments section below!