“Every company’s greatest assets are its customers, because without customers there is no company.” – Michael LeBoeuf
Acquiring a new customer can cost up to 25 times more than retaining an existing one. Increasing customer retention rates by just 5% can boost profits by up to 95%. Considering these statistics, it’s no wonder that the most successful companies make building customer loyalty a top priority.
Offering high quality products and services at competitive prices isn’t enough. In order to improve customer retention rates, business leaders need innovative strategies. Are you looking for ways to breathe new life into your customer retention efforts? Gain some inspiration from these loyalty building methods.
Build Trust to Raise Retention Rates
Trust is powerful. Not only will 82% of customers stick with a brand they trust—83% of them will recommend that brand to their friends. But building trust isn’t a one-step process. Establishing and maintaining a trustworthy image takes time and effort. Here are a few ways to earn and keep the trust of consumers:
1. Offer Multiple Payment Options
2. Peel Back the Curtain
3. Create Seamless Campaigns
4. Perform Regular Site Audits
Boost Customer Retention Through Personalization
Seth Godin once said, “Don’t find customers for your products, find products for your customers.” Experts like Godin know that a solid sales and marketing strategy always centers around the customer. To retain and refine that focus, personalization is key. Here are a few ways brand managers can leverage personalization to grow customer retention rates:
5. Personalize Loyalty Programs
6. Make the Most of Customer Data
7. Create a Connection Through Handwritten Notes
For Higher Retention Rates Provide More Than a Product
The most engaging brands attract, convert, and retain customers using more than just products. The added value they offer consumers builds loyalty and keeps them connected even when they aren’t actively making a purchase. Try these strategies to strengthen that connection:
8. Educate Consumers as an Industry Expert
9. Help Customers Build Social Capital
- Reward with reputation: Amazon designates top reviewers and even has a Reviewer Hall of Fame. The desire to earn this title doesn’t just lead to more reviews—it increases the quality of those reviews, engagement rates, and even sales for Amazon and its partners.
- Create customer advisory boards: Microsoft created industry-specific advisory boards such as the Interoperability Executive Council or IEC. These boards are filled with top executives from around the world. Not only do these members feel more involved in Microsoft’s process, they also are more likely to act as brand evangelists and raise retention rates through their own recommendations.
10. Handle Complaints the Right Way
- Respond quickly. Set up Google alerts and continuously monitor social media accounts so you can identify and address issues as they arise.
- Start with a Plan. Build a list of potential problems and have strategic guidelines on how to handle common types of issues so your team doesn’t have to “wing” it. Be sure to tailor each response to the sender and situation, but always have a plan to guide your responses.
- Keep an eye on tone. Sarcasm has no place in customer satisfaction. Try to cultivate a tone that’s empathetic and genuine
- Explain the journey. If you need to refer an unhappy customer to other employees or departments, keep them in the loop and explain why. This will prevent them from feeling like you’re simply avoiding them or “passing the buck.
- Follow up after the resolution. Interaction with a dissatisfied customer shouldn’t end after their immediate issue is addressed. Follow up with them in a few days or a week to thank them for being a customer and ensure they don’t have additional questions or concerns.
As you continue to build your brand, keep customer retention at the top of your list of priorities. Remember the 80/20 rule: that 80% of your revenue is driven by the 20% of customers who remain loyal year after year. Loyal customers are your most valuable resource. Reward them for that loyalty and they’ll reward you with steady profits for decades to come.