The Importance of Customer Retention
We live in a time with intense competition, knowledgeable consumers and overwhelming content. As a result, customers have more options and information available to them than ever before. This makes them allusive, switching between different brands, testing until they find the exact combination of product and service they are looking for.
Naturally, we want to focus our marketing efforts on finding new ways to acquire these customers. Approaching them through every channel imaginable, trying to get noticed in a time where people only have time to ignore. What can we do to get customers to use our product and service?
How to acquire customers seems like the question ever company WANTS to answer. HOWEVER, it is not the first question you NEED to answer. First, address how are you going to keep more of your current customers?
Why should you be paying more attention to customer retention?
First of all, keeping a customer is generally much less expensive than acquiring one. A penny saved is a penny earned, right? Hopefully your customers are worth more than a penny, but as long as the money spent on keeping a customer is less than what the customer is worth, you should do your best to save that penny.
Keeping a customer means one less prospect within your competitions grasp. Competition can vary depending on your industry; however, if your company provides a product/service viewed as valuable or necessary, and a customer leaves, they are most likely heading off to try on one of your competitors. Think about it, if your company sells toothpaste and a customer stops buying your brand, do you think they just decided to stop brushing their teeth?
Retention is a great way to help acquisition. When picking classes in school, what was your greatest influence? Probably which classes your friends were taking and which classes your friends recommended. Well, I guess nothing has changed since high school because that is pretty much how the rest of the world works – referrals are great customer prospects. So, treat your customers well, show them value and nurture them and they will be more likely to refer their friends to use your product/service as well.
What steps should I take to increase customer retention?
Every business is a little different, but here are some suggestions on how to increase customer retention:
- Loyalty Program: Great way to provide more value for your consumer while creating a trusting, loyal relationship.
- Provide Information: Blogs, social media updates are awesome methods to communicate with your customer and feed them useful information.
- Employee Incentives: Motivate your employees to be the best they can be! Generally, great customer service dramatically increases customer retention.