We’ve always heard that keeping an existing customer and getting them to buy again is much cheaper than attracting a new one. Not only that, the buying rate of existing customers is more compared to the buying rate of new customers. This is the reason why major companies and brands shift their focus from attracting new customers to focusing on existing ones. What does customer retention mean? And how can you focus on it in your brand or company and increase the loyalty of your customers?
What does customer retention mean?
As the name suggests. Customers retention is represented in some of the strategies that brands make to attract their current customers. Those strategies aim at making the customers buy and deal with your brand again. Besides that, they aim to increase the profits obtained by each customer and to increase the Customer Lifetime Value (CLV).
You can use customer retention strategies for previously converted customers to retain them more with you. Maintaining customers also helps you to strengthen your relationship with them and make them loyal to your brand. It also makes them free marketing agents for you as they market your brand and attract other new customers.
How to calculate customer retention rate?
Don’t worry, this won’t be a boring math lesson. Calculating the customer retention rate is very easy, as it is related to the number of customers that were acquired and the number of customers who repeated the purchase process at least once in a specific period that you control.
Calculating your customer retention rate makes you aware of your brand statistics and know what are the effective strategies and efforts that help you retain customers.
Your retention rate is calculated by subtracting the number of customers acquired at the end of the time period from the number of total customers at the end of the same period. The result is then divided by the number of customers at the beginning of the period and then the total is multiplied by 100.
Why do you need customer retention?
You may ask yourself a question. Why do I need to maintain existing clients? While I can invest my efforts in winning new customers who represent new opportunities for your brand. The answer is that existing customers are cheaper and easier to sell to. Studies have shown that the selling probability to a new customer ranges from 5% to 20%, while the probability of selling to the current customer ranges between 60% to 70%. It is much more that’s why you should consider retaining your customers more as well.
Your existing customers also help you develop your business for the better, as they help you get higher conversion rates. Your existing customers have already bought, it will not be difficult for you to convince them to deal and buy from you again. Also, existing customers are more honest in terms of their feedback towards your services and their experience of dealing with you. And this will help your brand to develop further by listening to your customers and meeting their requirements.
1. Offer your customers a special buying and dealing experience:
It appears that providing a customer with a premium buying experience increases the chances of them remaining with you. Treating the customer professionally makes him attached to your brand and feels loyal to it, which leads him to buy from you again. Also, do not forget to provide excellent after-sales services to your customers in case they encounter anything while using your product. Because as statistics prove, 70% of customers support brands that provide good customer service.
Not only that, but the same studies also proved that 52% of customers said that they made additional purchases after receiving good treatment by brands. Therefore, you must think carefully about providing excellent customer service if you want to maintain them.
2. Monitor your existing customers and make sure to remind them via e-mail:
Always make sure to keep your customers under your watch. Monitor those who purchase a product repeatedly and suggest other related products. Keep an eye on those who purchased a long time ago and remind them by emails personalized to them.
The key here is always to feel the customer like they are a member of the family and that you care for them. By applying this strategy, you will increase the loyalty of your customers and contribute to maintaining them.
3. Design loyalty programs to help retain your customers:
Loyalty programs are programs that provide rewards for your customer’s loyalty to your brand. These rewards may vary to include discounts on services, or products, or to benefit from them for free. This type of reward program helps you win customers and strengthen your relationship with them.
Loyalty programs have always proven effective in maintaining customers and in strengthening the relationship between the business and the customer, making him repeat the purchase process more than once, and recommending your store to his acquaintances. Don’t forget to incorporate loyalty programs into your brand to increase customer retention.
4. Make the process easy for your customers:
Have you tried the process of buying from famous online stores before? Personally, my experience with the Amazon Kindle store was very smooth as I purchased a book with just one click, and this made me repeat the purchases again.
Facilitating procedures with your store, whether they are purchases, or registering in accounts to receive exclusive offers that you provide, helps you a lot in winning the customer and making sure to give him a distinct experience. That will push him to buy again and deal with your brand all the time. Therefore, always make sure to facilitate transactions for your customers to make them simple and easy.
5. Keep your promises to your customers to keep them:
The worst thing you can do for your customers is to raise their expectations and promise them many things. But later, they will be shocked by reality because you didn’t keep your promises for any reason, whether it is a financial shortage or lack of time.
Always try to keep your customers’ expectations logical. Besides that, make your commercial goals easy to achieve so that you do not fall into trouble later for any reason. This strategy will help you satisfy your customers and make them happy to deal with your brand, so do not forget to apply it when dealing with them.
Finally, we can say that customer retention is one of the most important things that you should focus on in your brand. Existing customers have a greater chance of buying them than new customers. They also contribute to increasing your profits and support you through their evaluations and feedback about your services and through recommending your brand to their acquaintances.
Boonus is a platform that provides you with the best loyalty solutions for your customers (points programs, repeat purchases, and other programs) to help retain them and make their experience with your brand distinct and memorable. Start with us now and offer your customers the rewards and services they deserve.