10 examples of customer retention techniques to drive customer loyalty
To retain customers, companies are ready for a lot, because loyal loyal customers provide a stable profit for the business and allow you to save on promotion. Let’s talk about popular ways to keep customers.
What is customer retention?
Customer retention is defined as a company’s ability to keep customers by employing numerous techniques and offering a positive user experience.
Businesses devote significant resources to recruiting customers through marketing, social media, and brand activities. Investing time, energy, and money in maintaining current clients is more profitable than attempting to acquire new ones.
Customer retention is a key performance indicator (KPI) for many firms since their ability to support present customers determines their short- and long-term profitability. It may immediately reveal if a firm has great goods, good service, user connections, and good data management software.
10 working strategies for successful customer retention
Because a happy and loyal customer implies product satisfaction, improved customer retention, a higher degree of customer lifetime value, and more profit for the firm, loyal consumers deliver direct advantages to the organization.
1. Inspire with a mission
Sometimes a brand evokes loyalty not by tactics, but by its views. Have you noticed that you feel better about companies that defend their point of view and try to make this world a better place?
Recently, consumers have been focusing more and more on the altruistic and environmental consequences of buying habits. Doing good is becoming more and more important. This does not mean that you should build your marketing on an altruistic message. The best way is to find what people care about and position your brand around it.
2. Use modern customer service tools
There are a lot of techniques like auto-calling, answering machines, and CRM to mark calls to the support service and provide a timely response to each request. They allow companies to stay in touch almost around the clock. The buyer goes to the one who not only provides a favorable offer but also does it here and now.
It is impossible to talk about customer service without mentioning call control. It is crucial to assess the quality of employees’ work based on important corporate criteria such as the number of accepted and missed client calls, the time it takes to answer a call, the number of complaints and repeated calls, the length of a telephone discussion, and so on. Phone call monitoring also aids in the resolution of other company issues, such as sales growth and customer loyalty, as well as the training of new workers.
3. Use personalization
The list of customer retention tools includes personalization of the mobile app and website. In mailings and SMS messages, it is recommended to call customers by name. Birthday greetings and calendar holidays increase customer loyalty. Articles, news collections, and reviews of new products and services are sent to clients by email.
In an attempt to retain customers, organizations encourage the most valuable customers. After analyzing the sales statistics, those who bring high profits are identified. Customers can be assigned VIP status, and offer additional services, promotions, and tariff plans. An individual communication program is being developed for the audience.
4. Talk to your customers
A company ought to take advantage of consumer feedback to identify problems and continuously improve its operations. Ask for feedback: what they are happy with and what they are not. So you will show your care and caring (and everyone likes to feel special and important). To receive feedback, you can ask to leave feedback, give gifts, and encourage in every possible way. Without this, you will not be able to improve your product and eventually lose customers.
One of the most significant techniques and components of customer retention software is collecting and managing reviews.
5. Use gamification
Gamification is seen as an extra technique for retaining customers. They optimize the purchasing process by using technological improvements on websites. Mobile applications now provide additional benefits for orders.
Gamification portals include user statuses, symbols, and tables of leaderboard clients. The shopping experience now includes elements of competitiveness and gaming. Online retailers now allow customers to create wish lists. Customers add items to their wish lists. Gamification is also used in other promotional tools such as loyalty programs and promotions.
6. Employ a loyalty program
Company privileges for regular users or customers:
- Bonus programs. For purchases, customers are awarded points with which they can pay for goods and services.
- Discount cards. Registering personalized cards for customers – cumulative or with a fixed discount – helps them make subsequent purchases with a competitive advantage.
- Multi-level loyalty programs. It includes comprehensive tools for retaining customers: free or preferential receipt of goods, and additional services of the enterprise. Regular customers and large customers are issued premium and VIP statuses.
- Preferential terms of delivery. Online stores offer free shipping for every fifth parcel or purchase for a given amount. The introduction of such a service increases the turnover.
7. Use subscriptions
Subscriptions are a great way to increase a customer’s LTV. At first glance, this reduces profits, but the company’s losses are covered by the fact that some users will be with you from month to month. This means that you do not need to pay for advertising. For the buyer, subscription services are more profitable than individually.
Today, the services combine and create entire ecosystems, subscriptions can be issued for reading an unlimited number of books, listening to music, or watching movies. And you can even study by subscription: you pay for access to the platform and use all the courses.
By enrolling users in Prime, for example, Amazon receives more money from the membership price while also increasing the likelihood that the subscriber would buy products from Amazon (since the subscription’s value is primarily derived from the free shipping).
8. Use emotions to anchor your brand
There is no point arguing with what emotions decide. When making decisions, we try to be guided by reason, but most often they decide for us (although it also depends on the product). So look for ways to generate positive emotions in the form of new experiences beyond the core products, services, and value propositions.
9. Use social media and create good content
Businesses should utilize social media to market their products and services for free. Social media platforms are also an excellent approach to inform and attract clients. Good content and communication develop customer relationships and increase client retention.
10. Email marketing
It may become an extra method of developing business loyalty and maintaining clients. Sending targeted communications, generating relevant content, informing clients about discounts, and reminding them about purchases are all tools for fostering long-term connections with customers.
The following mailing kinds are recognized in email marketing:
- Respond to consumer activities with automated alerts. Customers receive confirmation of their registration, subscription, and order work. To new users, the firm provides introduction information on the product, service, or program.
- They enable you to enhance audience loyalty. To keep customers, educational information, partner offers, discount and promotion messages, digests, expert views, and suggestions are provided through email.
Why do you need to take care of the existing clients?
Customer retention is an excellent way to cut expenses and increase critical business KPIs, but there are numerous more reasons to keep customers who currently buy your products or utilize your services.
Saving marketing resources
It is usually simpler to persuade a returning consumer rather than a new customer to make an online transaction. The first ones have a lot of knowledge, understand your abilities, are more familiar with the catalog, and may have created a list of favorite things that they can purchase from you.
Well-known marketer Neil Patel cites the following data: on average, a lost client costs the company $ 243 worldwide. Moreover, according to Patel, 61% of your departed customers do not just stop using the product – they switch to competitors.
Increasing LTV
Regular customers have a greater conversion rate and a higher LTV (Lifetime Value – the customer’s lifetime value) because of their valuable behaviors on the store’s website. They are familiar with your store and selection, thus they constitute an active audience of site visitors – a portion of the consumer audience that takes targeted (useful) activities such as viewing a specific product card, subscribing, purchasing, and so on. This assists you to enhance sales because most frequent clients finish their Customer Journey with a purchase.
Increasing сustomer loyalty
According to a Harvard Business School study, in the financial services sector, a 5% increase in customer retention leads to a profit increase of more than 25%. This is because loyal customers tend to spend more money; their average bill for the amount usually surpasses the purchase receipt of a new client. As a loyal client makes substantial purchases, the company’s operational costs for maintenance are reduced. However, these are not the only grounds in favor of a loyalty approach. There is also a non-monetary benefit: committed consumers may become ambassadors for a brand or company, leaving useful comments about you, providing high-quality feedback after completing a purchase, recommending your store to friends, and so on.
When it is necessary to launch retention marketing
Several signs suggest that it is necessary to work on customer retention marketing:
Poor service
Poor quality of service can alienate customers from your company. Nowadays, the market offers a variety of goods and services, and companies are doing everything to attract and retain consumers. All other things being equal, customers choose those who provide them with high-quality service.
To establish contact with customers, you need to create a feedback system. Customers should be able to leave feedback about the purchased product and ask their questions to specialists. It is necessary to organize the work in such a way that buyers receive a response to their requests as soon as possible.
An important part of the customer retention strategy will be competent recruitment. It is necessary to constantly train employees and monitor their competence, as well as improve the quality of service based on customer feedback.
One-time sales
If you see that the majority of consumers purchase goods from you for the first and last time, then this serves as a signal about the shortcomings of the product or service.
It is necessary to solve the problem of single purchases and work on transferring one-time customers to the status of permanent ones.
A complicated product
New or rare products on the market require a special approach to advertising and customer service. The same can be said about a proposal consisting of several elements, each of which needs its micro-customer journey.
Ideally, the marketing policy for such products will be handled by professionals. To do this, you need to hire qualified workers and constantly train staff.
Things to remember
Customers need to be retained. Regular customers bring the company more profit and are cheaper than those who make only one or two purchases. In addition, customers who leave are more likely to switch to competitors, and not just stop using the product.
These strategies will help you to be closer to your consumer. You will not just be another seller on the market, but the one to whom they will come purposefully, because you are reliable, high-quality and you communicate with the client.
