Did you know that Increasing customer retention rates by 5 % increases profits by 25% to 95% (Harvard Business Review)?
Here is another interesting statistic:
“89% of consumers have switched to doing business with a competitor following a poor customer experience.”
You can have the best marketing strategy for customer acquisition but if your customer satisfaction and therefore customer retention is low, the chances are you business will fail in the long term.
In this post we will look into why customer retention is so important and how you could improve yours!
The sales value of a loyal customer
Customer retention is crucial to drive your business to success. A loyal customer equals regular sales without spending resources and efforts in customer acquisition. The formula is pretty simple:
Happy client = Returning client = Increase in sales + decrease in marketing investment = Jackpot!
Making sure your client is satisfied should be priority N°1 of your business.
The marketing value of a loyal customer
The other value than the long-term sales you can get from a satisfied customer is what you can get out of Word-of-Mouth and online reviews. Indeed, the opinion your clients have about your business will impact your brand reputation and sales.
“90% of customers are influenced by positive reviews when buying a product.”(Dimensional Research).
A satisfied client will leave a positive review, which will encourage others to try your products and services. However, a few negative reviews will damage your brand reputation and it will be very difficult to overcome.
How to achieve high customer retention
“Your most unhappy customers are your greatest source of learning.” — Bill Gates
First thing to do to stop your clients from leaving is to understand why they want to leave.
Use your previous data you can collect by read negative reviews, emails and other form of communication to identify what issues previous customers encountered with your customer service.
You can also send emails to customers who left to ask them what were they not satisfied with and even ask them if they have any suggestions!
Once you’ve created a database of encountered issues, you need to work on each identified matter to fix it an improve your service. Don’t stop there, you can keep updating it.
Pro tips: If a customer leaves a negative online review, don’t ignore it. Turn it into something positive! Reply to it, be polite and show that you are trying to fix their issue. This will show to your audience that you do listen and care about your clients and will establish a relationship of trust.
In conclusion, a high customer retention will lead to an increase of sales but it also helps to build a solid brand reputation, therefore improve your customer acquisition. The key to a good customer service is listening. Nobody likes to feel ignored so LISTEN to your clients and communicate with them, make them feel valued!
Foxynet Solutions provides digital services that can help to enhance your customer experience. Contact us to know more!