While there’s not a single person who is perfect and has never made a mistake, some mistakes can cause irreparable damage. Hence, it is really important to learn from your mistakes and of others. Prevention is always better than cure, especially when it comes to your business and customers. Customers are the lifeblood of business and losing a single customer can prove to be detrimental, not only in terms of losing a few sales but also losing your potential clients.
Retaining your customers is no rocket science. However, it does require you to go the extra mile for your customers. It doesn’t have to be something huge. Just enough for your customers to feel satisfied and come back for more.
What is customer retention?
Customer retention refers to the capability of a business or organization to retain its existing customers over a particular period of time. It involves building strategies and tactics to encourage customers to extend their relationship with the company, repurchase its products or services, and remain loyal.
Customer retention strategies are crucial for businesses as it directly impacts their long-term success and profitability. Moreover, acquiring new customers can be more expensive and time-consuming compared to retaining existing ones. By focusing on customer retention, companies can amplify the value of each and every customer and build a loyal customer base. Customer retention helps a business grow and succeed in many different ways.
Why Is It Important To Retain Customers?
It is crucial to retain customers for various reasons:
1. High Cost of Customer Acquisition
Acquiring customers requires a high budget, effort, and time. Retaining your customers is more cost-effective than acquiring new customers. Moreover, you’ll also need to put efforts to retain those new customers. It makes sense why retaining your customers should be one of your top priorities. By focusing on customer retention, businesses can optimize their marketing budget and allocate resources efficiently.
2. More Revenue and Profitability
More the people are satisfied, the more likely are they to visit you again and purchase your products or services. This results in an increase in the customer lifetime value, higher revenue, and more profits!
3. Edge Over Competitors
A loyal customer base gives businesses a competitive edge in the market. Satisfied customers recommend and advocate for the brand, attracting new customers and distinguishing the company in a crowded marketplace.
4. Invaluable Feedback and Insights
Customers that know you and prefer you will always want the best for you. And, since they keep returning to you, they know your business and how things work around there quite well. They possess the ability to provide valuable feedback and insights that assist businesses understand their preferences, identify areas for improvement, develop better products/services, and improve the customer experience.
5. Priceless Customer Loyalty
Strong customer relationships help build loyalty and trust. Loyal customers prioritise the relationship over price or promotions, providing stability and reducing the risk of losing them to competitors. So you must convert your customers to your brand advocates.
6. Enhanced Reputation and Credibility
Satisfied retained customers become your brand advocates, sharing positive experiences and reviews that enhance the company's reputation and credibility. Happy customers can often lead to obtaining new customers through referrals and word-of-mouth.
Customer retention is incredibly crucial for the long-term success of a business. By focusing on retaining existing customers, companies can achieve sustainable growth, improve customer lifetime value, and build a loyal customer base that serves as a foundation for continued success. Most business owners are aware of the importance of customer retention and make efforts toward it. However, there are some common yet deadly mistakes that most businesses make.
Here are the 5 Deadly Mistakes That’s Costing Businesses Their Customers
1) Poor Customer Service
Poor customer service occurs when a customer feels their expectations were not met or needs were not fulfilled. Lack of satisfactory customer service not only leads to a loss in revenue but also benefits your competitors by diverting that revenue to them. According to a report by Trends, top indicators of poor customer service are long waiting times, an automated system that makes it nearly impossible to reach a human, rude staff, and having to repeat the same information multiple times.
It is no longer enough to just have a good product or a service. Most companies are setting themselves apart by providing exceptional customer service. It is high time to up your game. The most crucial remedy for this is to hire and train a team of competent support professionals who can consistently attend to customer inquiries and guide them through any difficulties they may face. Empower your team with well-defined procedures and enough resources to effectively tackle common issues and queries.
Create policies that are customer-centric and ensure all the queries and criticisms by the customers are dealt with empathy and politeness. Utilizing customer service tools like help desks, CRMs, live chat software, and knowledge bases have been proven to build up the service infrastructure. This, can elevate customer satisfaction levels and contribute to improved customer retention.
Pro Tip: Keep your team well-informed and adaptable to emerging trends. Don’t ignore any customers and be harsh to them. Providing better customer service improves your brand reputation and loyalty.
2) Lack of Self-Help Resources
Not every problem or concern your customers encounter requires reaching out to customer service. Dealing with a human service representative can be inconvenient for everyone involved, especially for minor issues that can be resolved quickly. To prevent any unnecessary frustration and save your users' time, it's beneficial to have readily available information to address common problems. This approach leads to more satisfied customers and improves customer retention.
The solution is to invest in and maintain resources like knowledge bases. These platforms enable you to cut down the need for time-consuming service interactions, ensuring that customer interaction is efficient. Such coordination assists to reduce stress for your customers, showcases your perfection and professionalism, and ultimately assists you in retaining users.
Pro tip: Talk to your sales and customer services teams to find out the most commonly asked questions by customers, and integrate the answers into your knowledge base to reduce reliance on customer services.
3) Lack of Sense of Community
According to statistics, the sale success rate of existing customers is 60-70% as compared to 5-20% for new customers. Needless to say, it is essential for your business that you focus on your customer retention strategies. One of the best ways to retain your customers is by making them feel that they are a part of something big. Establish a sense of community. Humans are social beings. They like to feel belonged. Nurture them to retain them.
You can establish that sense of community in various ways such as giving your customers early access to your products or services, enticing them with exclusive discounts, offers, and rewards, and hosting exclusive events tailored for them. Rewarding your customers can make a significant difference in setting you apart from your competitors and building strong customer relationships.
By prioritizing existing customers and making them feel valued, you provide them with compelling reasons to return.
Pro tip: Create no-brainer offers that your customers won’t be able to say no to. You can leverage the offer in your favour to market and brand yourself
4) Not Monitoring Customer Experience
Are your customers satisfied with your products, the quality of customer support, and their overall experience with your brand? It's crucial to determine where they encounter difficulties during their journey, and what are they loving the most about their experience and your products or services. This will help you find ways to enhance their experience with you. However, you may never uncover the answers to these questions unless you engage with your customers directly.
Neglecting the regular collection, monitoring, and analysis of customer feedback means missing out on significant opportunities to gain insights into areas where your business can improve. Consistently assessing how customers perceive your brand and taking action based on their feedback greatly contributes to customer retention.
Pro Tip: It is essential to develop a robust customer feedback strategy and initiate the process of gathering feedback from your customers. Implementing surveys like the Customer Satisfaction Score (CSAT), Customer Effort Score (CES), and Net Promoter Score (NPS) can assist to measure customer satisfaction and gain a deeper understanding of your customers' requirements.
5) Failing To Deliver Personalised Experiences
In today’s market, consumers expect brands to treat them as humans than just numbers. This is why personalisation plays a basic role in shaping customer experiences and fostering customer retention. According to a report by McKinsey, 71% of consumers expect companies to deliver personalized interactions. And 76% of the consumers get frustrated when this doesn’t happen. Companies that grow faster drive 40 percent more of their revenue from personalization than their slower-growing counterparts.
When you do provide your customers with a personalised experience, they feel valued and special. And, that’s how every human wants to feel at the bottom of their heart. When you enrich their experience, they enrich yours. They keep returning to you for anything they need in the future. Moreover, they wouldn’t hesitate once to recommend you to others, which would help in building word-of-mouth, brand reputation, and acquiring new customers.
Pro Tip: Use the power of data analytics to gain a deeper understanding of your customers. Analyse their behaviours, interests, needs, and preferences through data-driven insights. Incorporate this valuable information into your customer success (CS) tools and marketing campaign management software to enhance the customization of your customer success initiatives and marketing campaigns. By doing so, you can deliver highly personalised experiences that resonate with your customers.
To retain your customers, you need to give your best in all the business activities relating to the customer. MouthPublicity.io helps you retain your customers by helping you in creating personalised customer experiences and establishing a sense of community. MouthPublicity.io is a word-of-mouth marketing tool that focuses on increasing brand awareness, building brand reputation, establishing brand loyalty, and thereby aiding in customer retention.
It helps you create lucrative offers for your customer through rewarding challenges that establish a sense of community. Added to that, it created personalised experience for your customers via its personalised messaging. Personalised messaging is a tool that sends personalised messages to your customers wishing them on their special occasions, such as birthdays, anniversaries, festivals, and more. It also lets you send any business updates, offers, or billing details.
Its word-of-mouth marketing lets you initiate, track and manage word-of-mouth for your business, making it easier to reach new customers with increased brand reputation and trust. MouthPublicity.io makes your marketing and branding more effective and thus plays a huge part in customer retention.
