5 Easy Changes You Can Make Today to Improve Your Customer Retention
October 20, 2021
Customer retention isn’t just important—it’s critical. The future of your business literally depends on the attraction and continued engagement of consumers who purchase your brand’s goods, services or experiences. Did you know it costs businesses five times as much to sell to a brand-new customer than an existing one? Therefore, keeping those current customers satisfied is essential. Customer retention is also a boon for your bottom line—even a five percent increase in customer retention can lead to as much as 95 percent higher profits.
Now that you know how vital customer retention truly is, let’s dive into some quick changes you can make to optimize your customer retention. These tips are in addition to potential bigger changes, such as using a better CRM software or working with a marketing agency.
Respond to All Public Customer Feedback
Sometimes, the simplest solution is the best one. Simply responding to the people that leave you feedback, whether it be on review sites or on social media, is the quickest thing you can do to improve customer retention. You don’t need any special equipment or new hires to do this. It’ll cost you nothing. But it’ll do a lot for your customer retention.
Why? According to one study, 68 percent of customers who abandon a brand do so because they feel that the company doesn’t care about them. The second most common reason cited in that study resonated with just 14 percent of people. Clearly, people feel very strongly about their needs and concerns not being addressed.
Responding to customer feedback helps to reinforce positive experiences, while potentially turning negative emotions into positive vibes. It also helps people who have yet to buy anything from the company. When potential shoppers find themselves on your Google Profile Business Manager or Yelp page and see that you’ve responded to reviews, they’ll see right away that you care what people think about your business. They’ll know that you strive to make the inevitable bad experiences right. That goes a long way for consumers, who are undoubtedly paying attention—nearly 90 percent of shoppers read customer reviews. Make sure those readers get the right impression from your responses.
Calculate Churn Rate
While all businesses should respond to reviews of all kinds, it takes more than replies to build solid customer retention strategies. To really get customer retention right, you’ll need to know where you’re starting, as well as how you’re doing. One of the most important customer retention metrics is known as churn rate—in other words, what percentage of your customer base you’re losing over a given time period.
Calculating churn rate is simple, and can easily be programmed into a spreadsheet. First, choose a time period you’d like to analyze—a month is a good place to start. Begin with your total number of customers, and divide the number of lost customers into that total customers figure. Then, multiply the resulting number by 100 to turn your churn rate into a percentage. For example, if you began the month with 500 customers and ended with 475 customers, your formula is (25/500) x 100, giving you a churn rate of 5%.
Continue to calculate your churn rate as you continue to work on customer retention. Over time, you should start to see that number going downward, showing you that your efforts are working.
Gather Consumer Opinions
Earlier, we discussed responding to consumer feedback in the form of public comments. However, to really get the pulse of your customer base, you’ll have to dig a little deeper. Fortunately, the Internet gives you the tools you need to do just that.
It’s easy to create an online questionnaire through a site like SurveyMonkey. It’s free, and it won’t take long to set up. More than that, though, you’ll get deep insights into how people really feel about your business. Some feedback won’t be pretty, but that’s what customer retention is all about—identifying problem areas and fixing them before it’s too late. Doing this not only makes your business better, but it shows consumers that you care about their happiness and demonstrates the value of their business.
It’s important to note that the quality of the feedback you get through surveys is dependent on two factors. The first relates to the questions you ask of your customers. Be specific with your questioning in order to get the feedback you desire. Keep the overall length of the survey short, and don’t ask for too much personal information. The second factor is tied to your response rate. It’s not easy to get people to fill out surveys, which is why so many businesses offer incentives to customers that take the time to respond. A promo code for a modest discount on a future purchase is a great place to start.
Prioritize Corporate Responsibility
Many small businesses are finding out that they can somewhat level the playing field against larger competitors by emphasizing their activities outside their storefronts. They are able to do this because their business models revolve around charity and giving back to their communities. Whether it be donations to the less fortunate or championing causes related to injustice, consumers feel strongly about these issues, and they’re willing to support brands that are aligned with their own beliefs.
You might already be donating to charity, or you might encourage your employees to volunteer in the community. These are things that you can mention on your social media feeds and on your website. Contrary to what you might believe, this isn’t bragging, although it might feel that way at first. You’re merely bringing attention to something you’re already doing that might resonate with your audience. The incentive to do so is quite clear—87 percent of people will buy a product from a business if that company supports a cause that is important to the customer.
Not every business is readily available to promote their charitable endeavors. If you’re lacking in this area, it’s a good time to start thinking about how corporate responsibility could give you a competitive advantage. Not that you should start promoting causes you don’t believe in, of course. But if you have a strong passion for a particular cause, promote it! You never know who feels the same way, and who will be a lifelong customer because of your efforts.
Include Existing Customers in Promotions
It seems that some industries revolve around consumers jumping back and forth between competitors. Cable and Internet services are examples of industries in which companies routinely offer their best deals only to new customers, and won’t give an inch to existing customers unless they call and threaten to cancel. It doesn’t do much for brand loyalty, to say the least.
While every business wants to attract new customers, it shouldn’t come at the expense of existing customers, who have demonstrated their loyalty over the years. If anyone should get a discount, it should be those longtime consumers who have kept your company in business.
It’s an easy fix to loop current customers into any promotions you have that are targeted specifically at new customers. Those who have done business with your company for a long time will appreciate the gesture, and it will increase their loyalty to your brand. Even new customers will rest assured that they’ll be part of future promotions and that they won’t be cast aside in the future in the name of generating new customers.
It’s not hard to retain customers, as long as you’re willing to put in the work to truly prioritize those individuals and show them how important their business is to your company. These changes can be implemented in minutes, and each can have a significant effect on your churn rate and customer retention. If you’d like additional information on increasing your customer retention, contact us at Commit Agency today.