Customer retention is the process of involving existing customers to keep buying products or services from your business. Customer retention is based on building trusting relationships with customers and making them loyal to your brand.
Customer retention definition is a notion that shows how many of the customers are loyal to your brand and are willing to make upcoming purchases. Customer retention deals with existing clients in contrast to lead generation, where the new customers are being engaged. It is widely known that the companies spend exorbitant costs in order to acquire new customers and at the same time easily let go of the old ones.
The statistics show that it is 7 times more expensive to acquire a new customer than to engage with an old one. However, by understanding customer retention, the company can boost its profit and promote the brand through loyal relationships with customers. Let’s find out the importance of customer retention.
Besides the success of the company, customer retention is not only about attracting new customers but also ensuring a decent level of services for existing customers. Customer retention increases return on investments (ROI), brings new customers, positively influences the image of a company, and levels up loyalty.
In terms of costs, for example, it is cheaper to deal with existing customers, and here’s why: generally your probability to sell your products to an old client is 40 percent more likely compared to converting new clients.
How to calculate customer retention rate? Here’s the general formula which will help your retention call center find out how well you’re building relationships with your customers.
So, we should subtract the number of customers acquired during the period from the number of customers at the end period, then divide the sum on the number of customers at the start period and multiply by 100.
Customer retention management implies implementing effective methods of working with existing clients. In order to retain customers, you should have retention marketing strategies based on the investigation of your sphere and services.
If you aim to increase customer retention, one of the key options is to ensure that the customer experience meets their expectations. Therefore, support agents are extremely responsible for the service they give, that’s why it’s crucial to have a specific strategy while working as a team. The main purpose is to find the best way to use the accumulated resources.
Customers are more likely to use the products of your company if the services are bringing results and return on investments (ROI) for them. If the client admits the fact that your company has increased leads, lifetime value, etc., then the possibility to gain customer retention is much higher as you bring them a positive influence.
Communicating results regularly will provide you with more loyal relationships with the customers. However, you need an appropriate system for tracking and addressing the metrics essential to the customer, which correspond to their goals you have considered together.
While working with the customers, you may also focus on the reputation of the company. Prepare a well-structured communication plan which will intersect with the desires of the customer’s journey in the company.
The ideal is to always invest on both fronts. After all, nothing is better than having a 100% stable base and constantly working on its expansion.
In practice, this can be difficult, but your company should make sure that the post-sales processes are not neglected.
In order to make new customers, you should properly engage with the old ones. Always ask for feedback and you will be able to work with the reasons and objections to make customer retention even better. Track trends on the market and try to find a compromise to satisfy both company’s and customer’s needs.
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