As part of our commitment to supporting small business owners, we have put together content focused on how to tackle various tasks. Whether you’re a newcomer to the business world or looking for additional resources, we’ve got you covered.
One of the biggest challenges associated with business success is keeping customers. With competition at an all-time high and near-constant advertising on every mobile device, keeping your client base happy and loyal can feel impossible. Review our five tips that outline how to keep customers.
The Importance of Customer Retention
Understanding how to keep customers is the first step toward creating an effective retention plan. Retaining existing clients is typically more cost effective than finding and attracting new ones, particularly when your business operates in an industry with a higher customer acquisition cost.
Review what goes into the customer acquisition cost and how to calculate it here.
Customer retention is a term that refers to anyone who pays for the products or services offered by your business more than once over a set period. Of course, what your company offers will determine the frequency and regularity of purchases made. But it’s important to understand that relying on retained customers can ensure consistency and regular revenue. According to research performed by Bain & Company, returning customers spend 67 percent more than new ones over time.
Rather than focusing your company efforts (and budget) solely on acquiring new customers, take time to develop a retention strategy. With a firm grasp on how to keep customers happy, it becomes easier to boost loyalty and maintain a strong base.
5 Customer Retention Strategies
Now that you understand why it’s important to maintain your client base, here are five strategies geared toward how to keep customers happy.
Ask for feedback regularly
It’s nearly impossible to retain customers if you don’t know what they like or dislike about interacting with your company. By asking for regular feedback, you can get insights into what your organization can improve. Even less-than-positive responses to requests are essential in building a retention strategy, so don’t be afraid to follow up with those who share negative feedback or reviews.
Establish loyalty through common values
Your business should have values that are clear, concise and communicated regularly. These values, when shared by customers, can serve as a significant boost in loyalty. For example, eco-conscious clients are more likely to choose businesses that are committed to reducing their impact on the earth. Research indicates that nearly three-quarters of consumers between the ages of 15 and 20 will pay more for services and products from environmentally committed companies.
Focus on delivery timelines
Whether your business ships products to consumers or provides services at their homes or businesses, focusing on timelines is a must for retention. In today’s world, customers expect faster turnaround times. If customer feedback shows that slow delivery or service times are a concern, make it a priority to improve them. And if shipping is a factor, always offer the option to get something sooner for an expedited fee.
Build customer profiles
It’s common practice to create profiles of members of a target audience, but few business leaders think to build profiles of existing customers. When you take this step, you can gain valuable insights into what these clients respond well to and what doesn’t generate the same level of engagement. The data gleaned from creating profiles may also support efforts to attract new customers with things in common, such as age, lifestyle preferences, gender, or income bracket.
Allow customers to pay later
When finances are tight, individuals often have to trim extra expenses. And if your business offers products or services that fall into the “extra” category, you may have trouble retaining customers. Offering the option to buy now and pay later (BNPL) can support your retention efforts, especially considering that over 75 percent of consumers reported being more likely to shop where a payment plan is available.
By implementing some (or all) of these retention strategies, you can gain a better grasp on how to keep customers. Plus, your customer retention rate (CRR) is likely to increase as you focus your efforts on those who have purchased from your business in the past.
Review additional posts in our “how-to” series for small business owners:
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