It is five times more expensive for you to acquire a new customer than it is to retain one. With Customer Experience statistics like these, brands are under more pressure than ever to boost customer retention.
That is, to hold a special place in your customers' hearts. Simply, you want your customers to stay with you a long time, and not bolt to your competition.
Customer retention strategies are all about relationship management. Like any healthy relationship, communication is one of the (if not the) most important foundations for the relationship between you and your customers.
In this post, we look at these three customer retention strategies to help you ensure strong communication between you and your customers, and strengthen your relationships with them.
Customer Retention Strategy definition
A customer retention strategy is an initiative your brand undertakes to entice customers to want to stay with your brand over time (“retain your customers”) and increase their customer lifetime value (CLV).
Customer retention strategies aim to achieve any number of goals, including:
- Turn new customers into repeat customers
- Turn repeat customers into loyal brand advocates
- Renew existing subscribers continually over time (especially for subscription models)
- Identify and minimize Customer Experience issues as quickly as possible
- Increase stickiness to your brand
Customer Retention Strategy 1: Be a good listener
Your customers have more power than ever before. They expect brands like yours to cater to their needs and their preferences - not the other way around.
Plus, it's quicker and easier than ever for your customers to share their experiences with others, and to broader audiences too. All it takes is one trending hashtag or a few shares by influencers for feel-good Customer Experience stories, or CX horror stories, to be seen by potentially millions.
In the age of Customer Experience, only being “reactive” doesn't cut it. Proactivity is a critical cog in any customer-centric company, especially for any B2C or B2B customer retention strategies.
What does this look like when it comes to your customer retention tactics?
At a high-level, it means always taking a customer-centric approach to all of your customer retention decisions. More specifically, it means less relying "solely" on gut-feeling or secondary data sources, and more actively collecting customer feedback on all your touchpoints. Most importantly, acting on this feedback, which we will look at a bit later.
Kate Zabriskie, President of Business Training Works, once said:
"The customer's perception is your reality."
Your customers are the ones experiencing your CX first-hand. Their motivations, their frustrations, their perceptions – customer feedback gives a glimpse into your customers' minds during any pivotal moment in the customer journey.
This feedback can provide the context you need to shine a light on blind spots you might have in your other data sets (e.g., web analytics, session replay). As John Russel, former VP of Harley-Davidson, shared a similar philosophy:
"The more you engage with customers, the clearer things become, and the easier it is to determine what you should be doing."
Any solid relationship is founded in strong communication and being a great listener. Positive customer retention strategies are no different.
Customer Retention Strategy 2: Be appreciative
Who doesn't like knowing that they are being heard, or that they are appreciated?
Your customer retention strategies should always incorporate some facets of this. For example, ensuring your customers know they can easily share their feedback with you about their experiences and make it easy for them to do so. That could mean (among many other examples):
- Having a Feedback tab shown persistently throughout their online session
- Inviting customers to complete a survey about their experience at the end of their session
- For your existing customers, asking them a simple question by SMS about their latest in-store experience
- Sending a survey by email to learn more about their experience with your support agents
Be transparent. Be open. Welcome any thoughts, ideas, and concerns about your CX on all your touchpoints, wherever they are in the customer journey.
Then, acknowledge your customers' feedback whenever possible. Thank them for taking the time to share their feedback. Doing something like sharing a loyalty perk with them (e.g., 10% discount on next purchase) as a "thank you" for their time can go a long way to showing your customers you care about their feedback. It can even elevate how they see your brand.
It's easy to forget that your customers could easily move along without sharing feedback, leaving you to wonder what's working about your CX program and what isn't.
Showing customers you care about their experiences and giving them an easy avenue to share the love (or their frustrations) is a powerful customer retention strategy brands can't afford to go without today.
Customer Retention Strategy 3: Right the wrongs, quickly
Every relationship has its speed bumps. The strongest relationships are the ones that can surpass these bumps quickly and come out on the other end even better than it was before.
In today's fast-moving world, time is of the essence. With a world of options at their fingertips, your customers can easily switch to another brand if it caters more to their needs.
A strong customer retention strategy will have a system in place to not only help detect poor experiences when they happen but also remedy them as soon as possible. You must not only ensure that you collect targeted feedback at critical moments in your customers' journeys (which we looked at earlier) but get the right feedback in the right hands at the right time so your team can act on it.
Commonly known as "closing the feedback loop" or "closed-loop feedback," this could mean doing either of the following:
Improving the individual experience
Improving your overall customer retention strategies
Automatically detect poor scores in your feedback and automatically share it with your front-line support staff in real-time. Help your team prioritize customer complaints and reach out to your dissatisfied customers promptly.
Insights you get from closing the loop can be shared within your organization. These insights can then be leveraged to identify ways to boost your customer retention strategies, even your overall CX strategy.
When it comes to any winning customer retention program, eliminating pain points in the customer journey quickly can go a long way. It can help strengthen relationships with your existing customers, prevent them from cutting ties with your brand, maybe even entice them to convince others to switch to your brand.
Brian Solis said it perfectly:
"Listening offers data. Hearing offers empathy and intelligence. Activity, action, and engagement steer perspective and encourage a sense of community and advocacy."
Strengthen your relationships with your customers
A healthy customer retention rate is vital to any brand’s success. Being a good listener, being appreciative, and quickly navigating speed bumps along the way are all keys to any strong relationship.
A comprehensive Customer Experience Management (CEM) solution should help you find opportunities to boost your pre- and post-conversion CX, strengthen your client relationships, and hold the keys to their hearts for years to come.
Banner image source: Unsplash