“Whatever you do, do it well. Do it so well that when people see you do it, they will want to come back and see you do it again, and they will want to bring others and show them how well you do what you do.” – Walt Disney
While he may have had animation pictures in mind, when Walt Disney voiced these words, he could just as easily have been describing the essence of ‘customer retention’. Keeping your customers so satisfied that they repeatedly return is the key to achieving business growth.
According to research conducted by the Harvard Business School, increasing customer retention by just 5% can lead to a profit increase ranging from 25 and 95%. Numerous other studies also point to the importance of customer retention on business performance.
The term ‘customer retention’ covers all the activities a business employs to increase repeat custom and to improve the value to a business of existing customers. Your customer retention plan should set out all this activity and set a goal for your customer retention rate, or, in other words, the number of customers who remain loyal to you over a specific time frame. You can calculate your current (or target) customer retention rate using this simple formula:
If you struggle to understand the key metrics for customer retention and support in your business, take a look at this free calculator from HubSpot.
To achieve your customer retention goals, you need a realistic, robust and actionable client retention plan to manage these activities effectively.
Let’s explore some practical ways to create incentives for the customers you have worked hard to acquire, motivating them to keep coming back for more.
To achieve your customer retention goals, it's essential to delve deeply into the customer journey and employ customer journey mapping techniques. By mapping out every touchpoint a customer has with your business, from awareness-building to post-sale interactions and review requests, you gain valuable insights into their experience. This evaluation enables you to identify areas for improvement and optimise the customer journey.
For a comprehensive guide on creating an effective customer journey map, refer to this article from HubSpot: "How to Create an Effective Customer Journey Map [Examples + Template]
Ensure your customer retention plan includes activities to maintain a dialogue with customers after the initial sale. This not only fosters a strong relationship but also provides valuable feedback that enables you to adapt and cater to their evolving needs. By actively listening to your customers, you can nurture their satisfaction, build brand loyalty, and even encourage positive word-of-mouth recommendations. One effective way to engage with your customers is by providing them with valuable information through curated content. A retention-focused content calendar can help you plan and deliver relevant content that addresses your customers' pain points, offers solutions, and keeps them informed about industry trends and developments. This content can take the form of blog posts, guides, tutorials, case studies, or videos. By sharing this content regularly, you establish yourself as a trusted source of expertise and value for your customers.
In addition to maintaining a dialogue, consider utilising your mailing list to send links to your customers, directing them to the relevant and insightful content you have created. This approach ensures that your customers stay informed, engaged, and connected with your brand. Providing them with useful resources not only strengthens the relationship but also positions your business as a go-to authority in your industry.
These are a crucial part of the buying cycle and play a vital role in customer retention. To optimise this stage, businesses should conduct market research to identify different customer groups and tailor their messaging accordingly. Here are a few examples of customer groups to consider:
Loyal, repeat customers: These are customers who consistently choose your brand and show loyalty over time. They deserve special attention and personalised follow-ups to acknowledge their support and encourage continued loyalty.
One-off customers: These are customers who made a single purchase from your business. While they may not be regular buyers, it's essential to leave a positive impression and maintain communication to encourage future engagements.
Need-based customers: These customers make purchases based on specific needs or circumstances. Understanding their unique requirements allows you to provide targeted support and follow-ups to ensure their satisfaction.
When incorporating post-sale deal stages into your Customer Relationship Management (CRM) system, regularly review the outcomes to identify successful approaches and areas for improvement. This iterative process helps you refine your strategies and maximise the effectiveness of your post-sale follow-ups.
Instead of focusing solely on one person, it's beneficial to build relationships throughout your customer's organisation. This ensures a strong connection even if individual contacts leave. Additionally, it increases your chances of becoming essential to the customer's organisation. Invest in relationships with the right people within your customer's organisation. Identify decision-makers and individuals who can benefit most from specific types of support. For example, contact the IT manager directly for technical issues or establish a friendship with the finance department rather than relying solely on your key contact. Remember that there are functional and emotional aspects to customer relationships. While the functional aspect provides the necessary service or product, an emotional connection based on knowledge of their passions and interests can greatly impact retention.
Delivering exceptional customer service is essential, even if your resources don't allow for round-the-clock support. In addition to query resolution, order taking and tracking, and complaint management, leveraging automation and chatbots can greatly enhance your customer service capabilities. By implementing chatbots, you can automate basic queries and direct customers to the appropriate departments or resources, freeing up your agents' time to focus on more complex customer issues. This empowers your agents to tackle meatier problems and provide personalised assistance where it's truly needed.
To ensure your customer service remains top-notch, it's crucial to analyse your customer service logs. Look for patterns or correlations between service calls (or the lack thereof) and customer churn. This valuable data can help you identify areas for improvement and address any underlying issues that may be impacting customer satisfaction.
While having a great sales team is important, it's equally vital to recognise that the skills required to acquire new customers differ from those needed to nurture and cultivate relationships with existing customers. Consider developing an account management function within your business to bridge this gap. Account managers can focus on building strong relationships with customers, addressing their specific needs, and proactively seeking opportunities for upselling or cross-selling.
Gain valuable insights and demonstrate your commitment to customer satisfaction by actively seeking feedback. Encourage customers to share their thoughts through surveys, feedback forms, or direct communication. Engage with customers on social media, responding promptly and professionally to mentions, comments, and reviews. Managing your Google Business Profile is crucial for addressing customer reviews effectively. Embrace feedback to strengthen relationships and enhance your brand reputation.
Furthermore, ask for testimonials from your clients to gather customer insights and build social proof. Highlight positive experiences and success stories to establish credibility and trust among potential customers. Consider inviting satisfied clients to participate in detailed case studies, providing valuable content for your marketing efforts. Shape your retention activities based on these testimonials to further enhance customer satisfaction.
An effective customer retention plan cannot be overstated. Your business success relies on loyal, happy customers as they form the backbone of your operations, enabling you to navigate challenges and seize opportunities. Developing your customer retention plan requires effort and regular reviews to adapt to changing business needs and the wider business environment. However, one thing remains constant: customers who feel satisfied doing business with you will keep coming back.
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