Businesses are always on the hunt for new clients. But why is it important to keep existing customers, and what is customer retention exactly?
What is customer retention?
For starters, the customer retention definition is a simple one: It describes an organization's ability to keep and retain customers. As for why it's important to maintain customer loyalty for reasons of both business operations and brand goodwill, the numbers speak for themselves—it's more expensive to attract a new customer than it is to keep a current one.
Put simply, customer retention rates refer to how well your organization is able to drive repeat business. Similarly, customer retention efforts can be defined as those activities a business undertakes to keep buyers coming back time after time. Both underscore an important point in today's increasingly globalized and competitive market. Specifically, that the reason why it's important to keep existing customers close—and keep customer retention top of mind—is that loyal shoppers are one of the most important sources of business growth and profitability today. As a business owner, it's not just enough to offer great products at great prices if you want to stay competitive. You've also got to make a point to build and maintain meaningful and positive relationships with clients over time at every turn as well.
If you're still wondering what customer retention looks like from a day-to-day operating standpoint, and what some clever ways are to implement it in practice, the following five strategies can help you start crafting loyalty-promoting programs that fans can't stop raving about.
1. Turn loyal customers into brand evangelists.
Online influencers (thought leaders who share their insights via social networks, audio/video aggregators and other multimedia and communications platforms) are one of the most powerful voices in advertising as of late. But paid spokespersons' influence is waning, with more and more brands turning to authentic sources like everyday fans to help showcase their products and provide recommendations that fellow shoppers can trust.
To tap into their passion and enthusiasm, and spread the gospel, reach out to existing buyers who embody the elements of your brand and vision, and provide them with complimentary products, services or solutions to talk about and share. Many will be all-too-happy to help spread the word about exciting new initiatives, and do so in exchange for the occasional public shout-out on official communications channels or a free sample.
2. Ask audience members for input and feedback.
One of the most powerful ways to pique customers' interest, excite audiences and ensure that they're more invested in the success of new ventures is to get them actively involved in the creation process. Among the simplest ways to do so is to put out open requests for help testing out advance trials of upcoming product or service rollouts, and request fans' feedback and input at every turn.
A favorite strategy of software and cloud-based service companies, these so-called “beta testing" or “early release" programs—which can readily be adapted for use in many B2B and B2C verticals—provide a cost-effective way to source input from frequent buyers. They also offer the opportunity to focus group test solutions at minimal cost, and see how end-users are utilizing your solutions in real-world environments. As an added bonus, doing so often provides vital insights into how to best fine-tune offerings that you simply can't get through computer modeling or competitive forecasts.
3. Crowdsource your next great creative venture.
Open innovation—i.e. creating a platform that lets you crowdsource creativity, and put out open calls to the general public for new ideas—is one of the most powerful methods for scaling the resources and insights available to your business today. Likewise, it's also a great vehicle for boosting your profile, enhancing audience engagement and increasing customer retention, while also helping boost trust and authenticity.
For example: Using online polls, surveys, and contests (e.g. asking fans to help design your new logo or provide snapshots of themselves for new social media campaigns) isn't just a great way to cost-effectively source more contributions, inspire brand loyalty and remind fans that you're listening to their feedback. It's also a great way to put a more personal face on your business, and rightly shine the spotlight where it belongs: On all the loyal customers who help your organization continue to go from strength to strength with each passing day.
4. Put every interaction in context.
Online analytics and artificial intelligence tools (many of which can be easily and affordably sourced as turnkey packages offering end-to-end solutions that work right off the shelf) can help you track every customer interaction today, and personalize each subsequent exchange. Using them, you can offer more individualized offers and promotions and more personalized customer service, helping boost sales, customer retention rates and overall satisfaction.
Online retailers are leveraging these solutions to suggest related purchases; streaming media providers are tapping into them to recommend featured content; and finance, travel, and insurance providers are using them to instantly reference and provide offers based on recent transactions. With data now the lifeblood of any organization, the more of it you make a point to capture, and the more you can translate these insights into actionable strategy that informs every client interaction, the more successful at retaining buyers that you'll be.
5. Use success stories to get the message across.
These days, it's no secret that effective storytelling is one of the best forms of marketing available to businesses today. Keeping this in mind, significant portions of your customer retention and sales outreach efforts should be focused on sharing case studies and examples of how clients are using your solutions to create positive results. Ask yourself: Are customers aware of all the many ways that your offerings can help them—and are they using these solutions and all their features to best effect? Wherever possible, take the time to educate them about the benefits and upsides your business offers through the lens of success stories featuring organizations just like their own.
The more you make a point to remind clients of the myriad ways you can assist them, and paint a practical picture of how to implement these partnerships in practice, the more repeat business you'll be poised to do. Peer validation can be a powerful tool for driving additional sales—and you know what they say about the squeaky wheel getting the grease.
One of the most powerful ways to pique customers' interest, excite audiences and ensure that they're more invested in the success of new ventures is to get them actively involved in the creation process.
After all, what is customer retention if not an exercise in getting to better know and more effectively work with your clients? Thankfully for those hoping to enhance their ability to attract and retain shoppers, all sorts of clever tools and technologies exist that can help you keep existing customers loyal to your business.
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