For all possible reasons that is out there, we all know how tough it is to acquire new customers year after year, and especially in these uncertain times of COVID-19. You need to stretch that marketing budget strategically to make it effective. As it is stated that, 82% of companies find retaining customers more cheaper than acquiring new ones.
When we say that it is the customer that you have retained time and again account for 68% of your sales. The role of retaining customers for e-commerce business is a different ball game altogether.
One can hypothesize that these e-commerce companies spend so outlandishly to improve tech that helps them bring closer to their existing customer. In fact, it is through the customer retention strategies that small retail houses and ecommerce companies take on big bullies.
There are several customer retention metrics, like repurchase rate, and a customer retention rate that helps these businesses to work out a plan. These new plans essentially cater to leveraging customer retention for a higher ROI, stronger customer loyalty, and overall business growth.
Customer Retention and High ROI
Staying in Touch with Customers
Just as you are concerned with achieving a high ROI for every campaign that you launch, customers also expect to achieve maximum ROI. They subscribe to your products to achieve the best value for the money. If you provide the best services they will stay with you, it is as simple as that. But at the same time, there are factors which affect the ROI from the customer perspective.
Suppose you have launched a new feature that has added cost, and the existing customer is not informed about this move well in advance; this might just shake up the ROI numbers. So, it is of utmost importance that you stay in constant touch with your customer and communicate about every change almost instantly. Also you need to be as transparent as possible with you customers.
Analyzing the Churn Signs
You can have all the data flowing through the system about customer churn rate, but if you don’t analyse the churn signs, it becomes tough to retain customers. So, the ROI takes a hit, at unexpected turns, and you need to be aware of it.
There are key questions to which you should be looking for answers. The first question is ‘at which stage of the cycle are you losing the customers?’. The second question is ‘why are losing the customers?’ And finally, you need to look into competitors that are sweeping away your lunch, i.e., ‘to whom you are losing the customers?’
On the sidelines, if none of the above answers provide for an actual cause or actionable insight, ask yourself ‘if you are targeting the right customers?’
Assessing Customer Feedback
The biggest asset that you have is your customers, it is very important that you listen to your customers. According to some of the reports, 93% of the customers are more likely to make a repurchase if the support services are quick and responsive.
Also, one of the key aspects of effective customer service is collecting feedback from time to time. Now, if you work on these feedbacks, customers feel that they are being valued, and hence they do not think of going away to other service providers.
Customer Retention Through Customer Loyalty
Customer loyalty is a hard thing to attain, especially in these competitive business ecosystems. A small mishap can cause the hard earned customer loyalty to trickle. One of the most common ways in which customer loyalty is gained, is through an effective loyalty program.
Here, basically, businesses are rewarding customers that stick around. However, the loyalty program or the reward program is being operated in an ineffective manner. This is because the business are aiming at providing big rewards, and not sustainable flow of rewards.
Business owners need to understand that reward programs need to spread periodically and the value of reward need not be huge. It is also important to understand the meaning of loyalty, which essentially is likeability, and the trust that has developed overtime with use of a particular service or product. As a matter of fact, it has been reported that 83% of the users loyalty stems from the trust on a particular product.
Customer Retention and Business Growth
Whether it is a newly fresh-of-the-blocks company or a pre-existing one, the aim somewhere down the line is to expand the users base. We often overlook the existing market that we cover, so instead of retaining, we go all out in acquiring new customers. The new acquisition comes with a greater and prolonged time period. So, there is no magic to the fact that customer retention is the key to growing business in a sustainable fashion.
There is one other section that believes that data pulled out from customer retention strategies, and filtering them through analytics completes the process. However, if we view customer retention through a business growth lens, you need to look beyond metrics.
From thereon, after the analytics work is done, you need to gauge the preference pattern of the audience. You need to find the why a certain set of loyal customers value your product the last month, the last week or right today. All these responses can be different. This is where you need to go beyond metrics to retain customers at will.
Here we have covered various aspects of customer retention in correlation with high ROI, increased customer loyalty, and tried to present an overall picture of how it boosts business growth. This is the right time to introduce yet another telling statistic in accordance with which businesses must retain 85% of their customers to work in scaling possibilities. So, it is crucial that no matter the size of your business or the extent of your customer base, focus on employing customer retention strategies that help you to have a steady flow of inbound orders.