4 Best Practices in Customer Retention

Consistently improving your customer retention rate is a key to building a sustainable business. It’s hard enough to find the right talent for your company’s roles. Once you have the best people in place, you need to make sure you're focused on retaining them long-term. To do so, you need to implement consistent improvements in customer retention year-in and year-out.

Consider these statistics:

• US companies lose $137 billion per year due to avoidable consumer switching (Forbes)
• Increasing customer retention by 5% can increase profits by 25-95% (MarTech)

According to SemRush, just 18% of companies focus on customer retention, whereas 42% focus on acquisition. Is your company among the many businesses yet to capitalize on a shift to a retention strategy? Try these best practices in customer retention, and you just might become a convert!         

Focus on the channels that marketers use most for customer retention

Brand engagement and customer retention are highly correlated, and statistics bearing out this connection get stronger as the younger generation’s market values rise. According to 99Firms text, email, apps, and social media, are the most effective and widely used channels for boosting customer retention. They are also effective at generating data around the customer's journey and buying behaviors. The more you know about your customers, the greater your brand will inspire loyalty.

Boost engagement through these channels and others

Customers who engage through various touchpoints, from social media, website, customer service, and individual staff members, increase their loyalty as they increase their engagement. As a business leader, it’s crucial that your customer-facing employees are a resource to customers. Employees should provide value, reinforce brand value propositions, and inspire ongoing engagement with every interaction, whether by phone or digital channels.

Start a customer loyalty program

Use a rewards card and/or a digital application, depending on your type of business. Digital applications have increasingly taken the place of swipe-able rewards cards, even for retailers. This way, the more a customer purchases or completes other requests, the more rewards they receive. Incentives can include free merchandise, advanced access to products, and price discounts. Structure your program by first reviewing your purchasing data in tiers. Think about what could incentivize customers to move to the next level. For example, an office supply dealer with 50% of its customers in tier 1, purchasing $500 or less per month and $100 or less per order, could start by testing FREE printer paper with every $150 purchase.

A rewards program will also help you capture valuable contact information, including email addresses, names, phone numbers, and buying patterns, to track this data with customer relationship management (CRM) software.

Invest in quality CRM software

A CRM solution helps you organize your database and provide everyone in your organization with tools to manage contacts and interactions. The average ROI for every dollar spent on CRM in 2014 was $8.71. In 2021, it had the ability to rise as high as $30.48 (the number has not been updated since 2014). A CRM solution offers analytical tools to help you understand discrete customer segments based on needs, behaviors, profitability, and potential lifetime value. It enables you to gain efficiency in timing-specific touchpoints, from sales calls to service check-ups.

With CRM, you can group segments into "promoters," "passives," or "detractors" by asking them to rate their experience with your business on a scale of zero to 10. Leverage your "promoters" through referral campaigns to influence new prospects to try your products and services. Engage your “passives” by testing different offers to raise their level of interest, sway doubters, and better serve them in the future.

A strong CRM solution will also help automate communications and follow-ups. This will minimize your staff's work and assist them in prioritizing customers and leads. This will result in higher conversion and closing rates, making your sales department more effective at monetizing your customer base. CRM solutions possess a valuable lead funnel and pipeline management features, ensuring you send the right messaging at the right time to the right recipients. 

You don't have to be a big brand to make customer retention a big priority. All it takes is a commitment to improving the customer experience and understanding the best practices to implement first. Let us know help with your business needs by engaging with ECI on Facebook!