Have you ever wondered what percentage of your customers return to use your services or products? What about the customers that haven’t returned? What are their reasons for not coming back? Customer retention is an important aspect of maintaining a sustainable business. Here are some tips, tricks, and data regarding the importance of customer retention and how you can maintain loyal customers.
Data Regarding Why Customer Retention Is Important
The cost to produce a marketing strategy to gain new customers can be 5 to 7 times more expensive than providing the tools necessary to retain repeat customers. Targeting customers that are already interested in your product can be a more efficient and effective use of your time and resources.
Want to calculate your CRR (customer retention rate)? Here is an easy equation from the article “The Ultimate Guide to Customer Retention” by Sophia Bernazzani:
Customer Retention Rate =((# Customers at End of Period – # Customers Acquired During Period)) / # Customers at Start of Period)) X 100
Sophia Bernazzani also mentions in her article why retaining customers is so critical to the success and growth of your business:
- Affordability: It’s 5-25X more expensive to acquire a new customer than it is to retain an existing customer.
- ROI: A 5% increase in customer retention can increase company revenue by 25-95%. Loyalty: Retained customers buy more often and spend more than newer customers. They’ve learned the value of a product or service and keep coming back, again and again.
- Referrals: Satisfied, loyal customers are more likely to sing a company’s praises and refer their friends and family — bringing in new customers, free of charge.
More statistics from Annex Cloud reveal yet another reason to actively diffuse negative customer experiences. “According to Marketing Metrics, if a customer has previously made a purchase from your company, there is at least a 60 percent chance that the customer will make at least one more purchase. Meanwhile, if a new visitor clicks on your site, the chances of that person becoming a paying customer are only 20 percent at the most.
Quality of service is essential for customer retention. According to Verint’s customer retention statistics, 31 percent of the time, customers switch brands because they found a new company with better prices. 34 percent of the time, however, they switch because they are dissatisfied with the service at the old company.”
Understanding the impact of customer retention on revenue is half of the battle, the other half involves understanding what you can do as a business to ensure customers return to you instead of your competitor.
Tips on how to Retain Customers:
According to Forbes there are 4 important things you can do to keep those patrons. These include:
- Know your customers better than they know themselves
- Implement feedback systems
- Go beyond nice and polite
- Provide anticipatory service
Some more ways you can increase customer retention include:
- Being consistent with the level of customer service your company offers
- Ensure customers are able to have relationships with multiple employees
- Create a loyalty program
- Boost customer loyalty with intermittent reciprocity
- Maintain a record of all communication and any previous issues
- Consistently ask for customer feedback and act on that feedback
- Provide case studies highlighting the positive aspects of the business
- Communicate with customers frequently
Our team at Raven CSI is dedicated to helping your company take a proactive approach at building rapport with your customer base. This can be achieved by using our real time online survey tool. By producing real time customer surveys, with mobile alerts you can reach out to customers quickly to ensure high quality customer satisfaction and get those customers to return time and time again.
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