When you’re trying to grow your business, bringing in new customers or clients left right and centre seems like an attractive option.
For many the pandemic highlighted just how important it is to have a strong focus on customer retention, because after all, happy customers mean loyal customers.
With your competitors at every corner, it's all too easy for your customers to think about leaving, but by building a solid relationship with your existing customers, you can minimise the risk of them leaving, plus gain lots of other benefits.
Read on to discover 5 key benefits of customer retention, and how it can help your business grow massively.
Why focus on customer retention?
It’s important to understand why you should retain customers. In a world of instant information and access to (almost) anything, attention spans and patience seem to be constantly reducing. Some customers might change from a brand they’ve been with for some time, just to experience variety. Keep your business fresh and exciting for your customers, and don’t forget to take an interest in them. A popular customer retention strategy is to conduct surveys about your business, to see what customers like, don’t like, and anything different they’d like to see. Find a balance between talking to your customers regularly without bombarding them – try not to annoy them by constantly asking them for feedback!
One of the major benefits of customer retention is the impact existing customers can have on your revenue. If a customer has used your services before and had a great customer experience, they are far more likely to come back to you in the future. Repeat purchases = repeat profits. In fact, loyal customers may well explore your brand further, to see what other products or services you offer. What’s more, the value of customer loyalty and retention means they are far more likely to pay premium prices. They like you and your business, so they would be happy to pay for your services.
Looking for ways to cut your marketing and advertising costs? Loyal customers are one of the most effective ways to drum up new business. Referrals from friends and family have a strong influence in somebody’s decision making process. These days, people will take to social media to talk about their experiences, both positive and negative.
Now here’s a scenario… you’re trying to decide between two similar products, A & B. They do the same thing and cost about the same. Your friend swears by product A, telling you how well it works and how they’ve never been let down by anything (quality, delivery, customer service). Which one would you choose?
Why retain customers? Happy customers will give fantastic feedback about the service they’ve received from you. Much like word of mouth between friends and families, great online reviews about your business really show the importance of customer loyalty and retention. If potential customers see nothing but 5-star reviews about you, then that’s hard to ignore – it’s an (almost) guaranteed conversion boost for you. Whether they’re leaving reviews on your site or tweeting their thoughts, don’t forget to thank them for their feedback as well, as this taps into the idea of personable user experiences, and showing your customers that you’re human.
Losing customers will affect your business, but it can also have a real impact on your team. If customers keep walking out on you, team chemistry will take a major dip. You may all start to lose confidence and question your abilities. You don’t need this doom and gloom around the team. If customers do go, don’t take it personally! Instead, do everything you can to retain your existing customers. Keeping customers lets you develop relationships with them, boosting opportunities for the future. With your customers liking you, getting great feedback from them is far more likely to happen, leading to overall employee happiness. Simple.
The importance of customer retention can be seen in performance between you and your competitors. Why? If you don’t, they’ll go straight to your competitors, and winning them back becomes a much greater challenge. Why would you want to make things easier for your rivals? Long-standing customers, who have always experienced an outstanding customer journey experience, wouldn’t think twice about defecting without good reason. Whatever market you’re in, it’s a competitive world and you need to do what you can to get ahead.
The importance of customer retention can have a major impact on your whole business’ performance. Now you know the importance of customer loyalty and retention, find out how you can increase sales with existing customers.