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What Is Customer Retention?

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US companies make a lot of effort to attract new customers. It's good to see because it creates more opportunities for everyone – including consumers – by introducing us to a whole range of new products and services that we might not have found out about otherwise. However, having a loyal customer base is more important than continually attracting new customers. Retaining existing customers is also cheaper than finding new ones. It makes sense for a business to focus on converting existing loyal customers into brand ambassadors. That's what customer retention is all about.

Read on to discover how to improve your customer retention rates.

Customer Retention: the Basics

Customer retention is the process of maintaining the customers you already have. It's a much more effective way to market a business. Why? Because you're increasing the rate at which they will buy from your company again in the future. There are three things you need to do as a business to achieve customer retention:

  1. Provide an excellent product or service.
  2. Communicate with your customers effectively.
  3. Find a way to follow up after closing the initial sale.

Achieving customer retention can be one of the most challenging parts of running a business. It's difficult to keep old customers interested in what you have to offer, especially as they will never remain as profitable as new customers. However, there are some ways that you can successfully retain your customers.

Customer Retention Rate

The customer retention rate is the percentage of happy customers who continue to buy from a company. The term also includes customers who remain loyal despite being offered competitive products and services by other companies. The average customer retention rate is around 20%, so most customers will not continue to do business with a company once they find better deals elsewhere.

Customers won't give away loyalty easily, as their priority will always be finding a better deal. If you keep your existing customers happy, they're more likely to spend money with your company. Undecided customers are more likely to be tempted away by competitors who are offering better prices at the moment.

Customer Retention Levels

Different customer retention levels depend on how much you're willing to commit to your customers' success and how often they purchase from your business. The customer retention strategies that work best usually follow up with happy customers to find out what they thought about the products or services you provided and what they want to see more of in the future.

Customer Retention Strategies

Suppose you're looking for some customer-retention strategies. In that case, there is a wide range of ways that businesses can keep their existing customers happy, so they'll continue providing business for as long as possible. Here are just some examples:

1. One-to-one Marketing

Find out what your customers want and then supply it to them. It's a good idea to ask their opinions and give them more of whatever they like best. If your customers tell you something about the products and services you provide, be sure to take their feedback seriously.

2. Customer Advisory Boards

These are the recommendations and ideas from people who regularly buy from you. It can be a great way to discover what your customers want and then supply it to them.

customer retention

3. Customer Referrals

Encouraging your happy customers to recommend their friends and family can be a quick and easy way of attracting new business, especially if you give them an incentive for doing so. Even services your online store will provide customer referrals for you. Ensure that your current customers understand your terms and conditions of customer referrals. That way, they'll trust your program and adhere to the rules.

4. Customer Loyalty Schemes

Customer loyalty schemes provide incentives for people to keep coming back and spending money with your company instead of buying from competitors. These schemes include giving discounts to returning customers or creating a system that allows customers to earn points and exchange them for goods or services.

The most significant benefit of effective customer acquisition and retention is that it helps keep a business running smoothly. Every time a potential customer walks through your door, they have a good chance of becoming a paying customer. When you have a customer retention rate of 20%, it means that every time you acquire a new customer, there is an 80% chance that they will not continue to buy from you in the future.

5. Takeaways

Customer acquisition costs are low, but businesses do not retain customers. Nowadays, free or cheap apps are readily available, and new companies emerge daily. The competition makes it even more challenging for existing businesses to retain customers, as new companies offer free apps and deals.

Keeping your existing customers happy and spending money with your company is essential, and it will keep them from being tempted away by smaller competitors who are offering better prices at the moment.

One-to-one marketing, customer advisory boards, referrals, and loyalty schemes are some of the ways that you can keep customers happy and loyal to your company. These strategies work best when they follow up with satisfied customers to find out what they thought about the products or services you provided and what they want to see more of in the future. Suppose you're looking for some customer retention strategies. In that case, there is a wide range of ways that businesses can keep their existing customers happy, so they'll continue providing business for as long as possible. Here are just some examples:

Encouraging your happy customers to recommend their friends and family can be a quick and easy way of attracting new business, especially if you give them an incentive for doing so. Even services online will provide customer referrals for you, such as Biz Bay.

customer retention

How to Win Customers from Competitors 

1. Offer the Best Possible Customer Service

When customers stop buying from you, it can be tough to win them back. Offer the best customer service possible to ensure that they'll come back and give you another chance. Here are some expert tips on how to do this:

2. Keep Customers Informed

Keep your WordPress site up to date with the latest information on what's happening in your business. You should also tell visitors about the exact waiting time for your products or services, so they don't have to worry about being kept waiting for something simple.

3. Don't Make Promises You Can't Keep

If you tell a customer that their new product will be with them on a specific date, make sure you can do what you promised. If it didn't arrive when you said it would, contact them immediately and tell them what's going on. You can then deliver the goods as soon as possible to ensure that they'll give your business another chance.

customer retention

4. Offer Flexible Delivery

Some businesses find that they're much busier in the morning than in the afternoon, so offering an AM or PM delivery slot can help them gain more customers. It all depends on how well you understand your customers. Work with what they prefer, and don't force them to fit in your schedule. If you can't meet their preferences, you should find a way to inform them about the same in the most professional manner possible.

Conclusion

Customer retention is what will keep your business running and your customers coming back. Give them what they want when they want it - and you won't have to worry about losing them to a competitor. Some businesses think that they can afford to ignore customer retention, as it's easier and cheaper to acquire new customers than it is to keep the ones you already have. However, following these strategies will ensure your business stays afloat for as long as possible, even if your competitors offer something better.

Keep customers loyal to your brand by giving them full transparency. You can achieve this through a full WordPress website with all your updated information, and even tips about the goods you provide. Through Bright Vessel, you can find a WordPress or WooCommerce plan that adjusts to your business's specific needs. Contact us to find out more!

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