Customer retention refers to the activities of a business’s ability to retain the existing
customer. It is the process of engaging current customers to continue buying
products or services from your company.
In business, customer retention
depends on attrition and silent attrition. Attrition is when a customer
discontinues using a product and service by informing the supplier that he will
no longer be a customer whereas, Silent attrition is when a customer stops
purchasing the products and services and does not intimate the supplier. This
defect is when a company or an organization prepares customer retaining
strategies. When corrective measures are implemented successfully to overcome
defection, the retention process increases, and this can be possible when there
is a quality relationship between customer and supplier.
Customer retention comes with
customer experience and satisfaction. Acquiring a new customer would prove
expensive compared to retaining the existing ones. Hence, customer retention is
more effective and profitable than customer acquisition.
Source:
Google
For any business to grow, customer
retention can be immensely helpful in the grounds of building a relationship
with customers and improving the brand value of the company. Therefore in
today’s retail business, customer retention
must top every retail company’s priorities. Retail has to become relentlessly
customer-focused.
By now you must have found out
that, customer retention is an essential part to build a sustainable and
scalable business. Throughout a given period, customer retention can be
measured monthly, quarterly, or annually, depending on the company. Before
considering the retention strategy, you need to understand what your current
Customer Retention Rate (CRR) is.
Customers at the end of the month - customers acquired this month
Retention Rate= 
Customers at the
start of the month
The above formula is the simple way of
calculating Customer retention rate so that companies can put their CRR metrics
into perspective and measure it over a period.
Before gaining information about
customer retention strategies (CRS), there is a huge requirement of
understanding about the whole cycle of CRS. It could help develop the reason
for the fact of how a company reached the stage of customer retention and
identify the significance of CRS. It would also ensure the company to
understand they have loyal customers through customer retention. But retaining
loyal customers cannot be developed or gained with one or two transactions; it
is a continuous process.
What are the strategies that can be
implemented in business for Customers Retention? Lets us have a look at some:
Communicate well and engage
with your customers
Avoid losing your customers by communicating and
building a relationship. Demonstrate any new product to give the customers a
chance to see if the product can be tailor-made according to the
recommendations.
Acknowledge the customers and keep them informed
about new products, offers, or any events that would come up. The customers
will surely appreciate it when they are made to feel valued and essential.
Communication is necessary to retain the attention
of your customers and help them connect with your brand. Identify with the
customers and engage them by asking which mode of communication they prefer on
a personal level, from messages to Twitter or e-mails. You can provide several
options to your buyers about your products, services, and
promotions through a proper communication channel.
Consider the customer
experience
Improve your sales channel by developing a
lifestyle brand that educates and entertains the audience. Provide a shopping
experience and understand what your customer expects. Customers know what they
want and what to expect from your team to get their work done.
Provide an end to end customer experience. When you
have new customers onboard, they may be apprehensive about investing their time
in your product. Create a process to provide the customer with an insight into your
product and create a smooth customer experience.
Ensure your staff is
knowledgeable
It is imperative to keep your staff updated on the
products and services your company is offering. Train your staff to meet the
demands of the customers instantly. A customer will return when they get expert
opinions and convincing pieces of advice.
Friendly staff with excellent listening skills,
energetic personality, and having an understanding of the customer’s needs can
set you apart from your competitors.
Tailor-made approach
Have a tailor-made approach to each and know more
about your customers. Determine what kind of offers are more appealing and
increase relevancy that will help your brand. Know what interests your
customers and churn them into actual purchases. Every customer has a
consumption pattern. Having gathered information about your customers, you can
give them offers that are appealing and add relevancy, which will, in turn,
increase the value of your brand.
Customer service
A customer leaving due to dissatisfied services is never healthy to the brand
value. Keeping your customer satisfied is a never-ending pursuit. Providing
extraordinary service helps to retain customers.
Create a loyalty program
Having a share of loyal customers added to your
brand can have a significant impact on customer retention.
Give your loyal customers something in return for
the purchases made and make them feel valued. Appreciate them sincerely for
doing business with your brand. Whether you offer a gift with a product or provide
special discounts at the best shopping malls or rewards for purchases with
further discounts can drive the overall sales of your brand.
It is more likely for your business to retain
customers when they join your rewards program, driving them to make repeated
purchases to redeem loyalty bonus or points.
Welcome complaints and ask
for feedback
An unhappy customer may not always complain. A
customer might have a perception that complaining would not make any
difference. A word of mouth complain to others is harmful to any business or a
brand. Therefore, never lose an opportunity to take a claim from your
customers.
Ask for feedback from your customers, narrow down
the data of the feedback collected and take action from there. Identify the
areas of improvement and the strength of your brand.
Value the opinions of your customers' complaint and
feedback, give assurance that you will actively use it to make your service
much better. The data-driven feedback provides you in-depth answers and helps
with customer retention.
Train your customer retention
team
If your company has a dedicated customer retention
team, provide training on the strategies. Motivate your team by letting them
know you rely on them to run the daily tasks and perform challenges. Introduce
any new strategies to your team and help them understand to follow it through.
These
are a few strategies you can follow to maintain customer retention ratio. There
are also many other strategies besides these that you can follow. However,
combination, keeping your customers engaged, meeting their specific demands,
prioritizing customer service can result in higher customer retention and also
improve your revenue sources.
