Where would your business be without customers?
You might have the best product or business model in the world, but without loyal customers, your company doesn’t have a chance.
That’s why in this post, we’ll show you how you can boost customer retention and satisfaction to make your job easier, improve your business opportunities, and solidify your position in the market.
Why Is Customer Retention So Important?
Customer retention is the measurement of how well a company attracts new customers and how well they keep existing customers satisfied. How many customers leave after trying your product?
You have high customer retention if you manage to keep most of your existing customers once they’ve bought from you.
But why worry about customer retention at all? In the old days, many businesses didn’t think they needed to. The old sales-based model of business prioritized finding new customers to buy your product. All of the efforts made that initial sale, at the expense of customer service or other post-sale services.
But this myopic focus on sales is short-sighted at best. Did you know that:
- It’s at least five times more expensive to acquire a new customer than to retain an existing one?
- Existing customers are 31% more likely to spend more on your products than new customers?
- And 80% of a company’s future profits come from just 20% of its existing clients?
And today, more and more businesses are adopting a subscription-based model, meaning that customer satisfaction is even more crucial. If customers become dissatisfied with your service, they’ll take their business elsewhere—meaning you’re losing out on months or years of potential revenue.
Why Do Customers Leave?
According to Arthur Middleton Hughes, founder of the Database Marketing Institute, there are only four possible reasons customers might stop doing business with you:
- They no longer need your product,
- They’re unhappy with your prices,
- They’re unhappy with your product, or
- They’re dissatisfied with the way they’re being treated.
Of course, each situation is unique, and there are many complicated reasons why an individual might decide to stop buying from a brand. But any reason likely falls into one of the categories above.
For some of these categories, you can’t (or shouldn’t) change anything to make customers stay. If they no longer need your product or can’t afford your prices, there’s probably nothing you can do to retain them. But if you’re seeing many customers leave due to dissatisfaction with the way your product works, that may be a sign that you need to offer additional product support or upgrades.
And that fourth reason is the one that you have the most power to change. The way you cater to, serve, and support customers can make the difference between an average customer experience and a great one.
And if you can give customers a great experience, they’re more likely to keep doing business with you in the future.
4 Ways to Ensure Customer Satisfaction & Boost Customer Retention Rate
So, that brings us to the age-old question: how can you improve your customers’ experience? What will boost their satisfaction with your brand—and, in turn, increase your customer retention rate?
Below, we’ll look at four proven ways to do just that.
1. Set Customer Expectations
One surefire way to lose customers is to fail to deliver on their expectations. Are your sales and marketing teams aligned with your product development and customer service departments? Are you accurately advertising your real product?
Not only should you communicate with the customers themselves, but your internal teams should communicate with each other to ensure every department is on the same page about your product’s offerings and function. That way, when it comes time to set customer expectations, it’s done right.
Avoid making promises you can’t keep. Be truthful about what problems your product solves and how it works, and you’ll keep customer expectations aligned with reality.
2. Improve Customer Satisfaction with Support and Effective Communication
Because 80% of consumers believe the experience provided by a company is just as necessary as the product or service it provides, customer service is essential if you want to boost retention.
Thankfully, customer support is an area of your business that you have a great deal of control over. Excellent service starts from the top; make it a company value and a part of your culture. Empower your service team and prioritize customer satisfaction in every interaction.
The happier customers are with the support and communication they receive, the more trust they’ll build with your brand—and the more likely they are to remain loyal customers for years to come.
Use Automation to Help Customers throughout Their Decision-Making Process
Automating everyday business tasks can help you get more done, more efficiently. And when it comes to customer satisfaction, automated customer service tools can communicate with customers quickly and at all hours.
For instance, you might invest in:
- A chatbot to answer any questions customers may have while browsing your site
- Email communication tools that let customer service teams track requests and collaborate on replies
- SMS automation to send sale alerts and follow up on cart abandonment
Building automation into your business comes with many benefits beyond keeping customers happy. Using AI tools effectively can cut down on wasted time and inefficient workflows—boosting your productivity and streamlining your processes across all departments.
At Ridgebase, we specialize in matching tech solutions to businesses to maximize growth. Book a meeting with an advisor today to get customized solutions for your toughest customer satisfaction challenges.
Keep Communication Open and Customer Satisfaction High with Feedback
If it’s your goal to boost customer retention, make it a practice to ask for and act upon customer feedback. After all, you won’t know how your intended customer experience matches up to reality unless you ask real customers.
Don’t just wait on customers to leave a negative review or make a complaint—be proactive. Send a survey after they purchase, either by text, email, or through a QR code on their physical receipt. And be sure to include a “Contact Us” form on your website that’s easy to find and use.
1. Reward Promoters and Loyal Customers of the Brand
And don’t forget the long-time customers and loyal advocates for your company! Build reward systems to keep VIP customers satisfied and enthusiastic about you.
For instance, you might reward loyal customers by:
- Offering free items with multiple purchases
- Using a loyalty card or points program
- Offering reciprocal discounts with other partnering businesses
- Giving discounts to customers who spend a specific dollar amount
There are many ways to motivate happy clients to do even more business with your brand. Whether it’s giving them discounts on future purchases, early access to new product drops, or special VIP-only deals, the options are as varied as there are types of businesses on the market.
And if you’re still not sure of the best reward(s) to use, take advice from tip #2 above: ask the customer what they want!
2. Remove Any Customer Pain Points
Finally, do all you can to eliminate any reasons the customer may have to leave—but be careful not to assume you already know what those pain points might be.
After receiving feedback in surveys, social media, and customer support analysis, make a list of the most common and easy to solve issues. For instance, if customers are commonly confused while onboarding with your product, incorporate chatbots or live chat to help ease them seamlessly into the experience.
Or perhaps your payment platform is too confusing. You may find that you can reduce friction within the buying process by reducing the steps in the checkout procedure and offering more forms of payment.
By showing that you care about eliminating challenging aspects of working with you and your product, you demonstrate to customers that their satisfaction is important to you—likely increasing your customer retention rate in the process.
Customer Retention FAQ
What are the key performance indicators (KPIs) of customer retention?
A KPI is a benchmark or a way to measure whether your organization is on track to reach its goals successfully. Customer retention rate is one of the most valuable KPIs for your business, primarily if your revenue model is based on subscriptions.
To measure your customer loyalty, pay attention to your retention rate or the number of customers that make ongoing purchases. And pay equal attention to your attrition rate or the number of customers that stop buying from you.
An indicator of success is when your retention rate is higher than (or increasing at a higher rate than) your attrition rate.
How can I increase customer retention rate and boost customer loyalty?
If you’re a marketing manager or customer service manager, customer churn is your worst nightmare. Keeping customers should be your primary aim—and you can do that by setting customer expectations properly and improving your customer support apparatus.
Once you’ve received feedback about your product and the customer experience, work to reduce or remove as many customer pain points as possible. And don’t forget to reward loyal customers and promoters of your brand so that they remain excited and engaged for years to come!
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