Michael is currently responsible for content operations, internal traffic strategy, and all other marketing initiatives at a fintech startup company. His experience bringing financial platforms to market includes helping some of today's top players find their footing. Michael specializes in editorial direction, branding, strategic planning, and creative development.
Nothing makes your ROI skyrocket like retaining a customer.
Customer retention, also known as customer loyalty, is how likely your customers are to come back again and again, as well as refer your business to others. In turn, you can double and even triple a customer's initial acquisition value by retaining them.
While some businesses may have loyal customers from the start, others may need to take specific steps to increase their retention rate. The process of keeping customers involves far more than good service and polite interactions — it’s about making them feel special every time they interact with you or your business.
In fact, each time you sell something, you create an opportunity for another sale in the future. That's why the path toward retaining customers requires you to understand:
who they are
what they want from your business
and how you can meet their needs.
That's just the beginning. Here are five actionable strategies for increasing customer retention.
Communicate Value Right from the Start
Customer retention starts with the initial sales process. After all, you can’t retain what was never yours.
As the best-selling author, Jeffrey Gitomer explained, “Great salespeople are relationship builders who provide value and help their customers win.”
To do this, you need to show the benefits of your product or service in a way that sticks with the customer long after they leave your shop.
For example, one way to communicate value is to share a story where your product changed someone’s life. Getting one of your past clients to record a testimonial can make the story much more powerful.
You can also communicate value by offering a guarantee, such as money back. A money-back guarantee communicates to customers that you stand behind your product and service. It says, "If you’re not satisfied, you don’t have to keep it."
For instance, a money-back guarantee can also help reduce the perceived risk of purchasing your product or service. Customers might be hesitant to try something new if they think there’s a chance they might not like it. Instead, a guarantee can help them feel more comfortable taking a risk on your business.
Another way to show customers that you truly want to help them is by delivering what you promise.
If you’ve promised a solution to a problem, deliver that solution.
If you’ve promised a product or service, deliver it on time and in the manner you’ve described.
One of the best ways to deliver what you promise is to set clear expectations for your customers. Let them know what to expect from you and your team.
You can do this, for example, with a service agreement. A service agreement is a written contract between you and your customers. It outlines the terms and conditions of the services you offer, timelines for delivery or progress, and any money that’s due from one party to the other.
Many businesses are using technology not just to improve their internal operations but also to promote customer retention. For example, some businesses use machine learning to create virtual assistants and chatbots. These virtual assistants and chatbots can answer common questions and even provide personalized recommendations based on a customer’s shopping history.
You can also use technology to create a seamless customer experience by bringing together several different apps or services in one place. For example, a transportation company might bring together an app, an online booking system, and an airport website to create a more intuitive and personalized experience.
Finally, it is essential to offer to finance to your customers. You probably already accept credit cards, but that’s no longer enough. Today’s consumer expects a buy now, pay later option provided through the store. In fact, customers are much more likely to make additional purchases when offered point-of-sale financing.
Make Small but Meaningful Improvements Constantly
Nobody has perfected the customer experience, but you can make small but meaningful improvements that significantly impact customer retention.
For example, if customers have complained about long wait times, you might make it a goal to reduce average wait times by five minutes each month.
You can further improve your customer service by focusing on the little things, such as smiling and making eye contact or ensuring every team member is trained in effective communication. Make sure any training you do is reinforced in regular team meetings. This will help you encourage your team members to improve.
However, these improvements will only help you retain customers if they know about them. That’s why it’s important to …
Provide Ongoing Customer Support and Education
Customers who feel they’re getting the most out of their purchase are more likely to stay loyal to your business. You can help keep them engaged in your product or service by providing ongoing customer support and education. This can include informational resources like newsletters, blogs, or even live webinars.
When you educate customers, you help them better understand how to get the most out of their purchase and make it easier for them to recommend your business to others.
The more you can educate customers one-on-one and see their reactions, the better you’ll understand their needs and the easier it will be to provide them with solutions. So, encourage them to reach out to you with any questions they may have.
Your business can experience a dramatic increase in revenue by retaining more customers. But it all starts with understanding who they are, what they want from your business, and how you can meet their needs.
Communicate value right from the start, deliver what you promise, use technology to assist customer retention, constantly make small but meaningful improvements, and provide ongoing customer education. These strategies will help you create a more satisfying experience for your customers, which can help you retain more customers.
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