10 Simple Ways to Improve Customer Retention Rates
Entrepreneur's New Year’s Guide
Client retention is an enormous factor for the success of agencies, B2B companies, SaaS businesses and many other organizations. In a subscription model, "client retention" means a continuing stream of revenue without the cost or effort of new customer acquisition.
And, in a standard product model, it means more total purchases for each new customer. The bottom line? Better customer retention means more revenue and a better brand reputation.
But how can you improve customer retention? The obvious answer is to make your products and services better, but that’s both ambiguous and non-directed. Instead, consider these 10 simple, specific ways you can up your customer retention game and strengthen the bottom line for your business:
1. Manage expectations.
Everything begins with expectations. If your customers expect phenomenal results and just get good results, they’ll be disappointed. If they expect decent results and get good results, they’ll be ecstatic. Obviously, if you set expectations too low, they won’t go with your company in the first place. So strive to set moderate, realistic expectations for your long-term performance.
2. Deliver more than you promised.
The next step of the process is to deliver more than you promised -- which means going above and beyond the call of duty and giving your customers things they didn’t expect. For example, you could offer a free bonus (like a product, discount or value-add) out of the blue, or anticipate a new customer need and address it proactively.
3. Stay transparent.
If customers feel that they can’t trust you, they’re going to leave. The best way to build and maintain this trust is to stay as transparent as possible, giving your customers as much information as they need. This includes staying in regular communication with meetings and updates, and proactively addressing problems before they become any worse.
4. Encourage loyalty.
Give your customers a reason to stick with you rather than go to a new competitor. This requires a bit of creative thinking, but try to find some unique selling point for them to stay with your brand -- it could be the provision of compounding benefits, a disadvantage to withdrawing after a certain point or ongoing additions that make your customers feel that your service gets consistently better.
5. Get personal.
Even though many of your client partnerships will be based on a company-to-company partnership, at the center of your relationship will be the engagement of one person with another. Accordingly, it’s in your best interest to add personal touches to your interactions: Hand-written notes, small gifts and personal exchanges are all valuable additions here.
6. Stay top of mind.
The last thing you want is to operate in the background. When your brand stays top of mind, it’s immediately perceived as more valuable and integral, meaning that the more a customer sees your brand, the less likely he or she will be to leave. You can accomplish this by improving your content marketing efforts, sending out regular newsletters or otherwise reaching out to your clients on a consistent basis.
For example, all of my clients receive a personalized weekly update, regardless of how much progress has been made. I’ve found that this helps retention rates dramatically.
7. Prove your value.
If you can objectively prove that your company is adding more value to clients than it costs them to pay for your services, there’s no logical reason for them to ever leave. When reporting, always focus on measurable results, and aim to be as logical as possible. That way, you’ll have an edge if your client makes a bottom-line decision.
8. Be there when things go wrong.
No client relationship is perfect; things are going to go wrong. Some of those things will be your fault, and some won’t. Regardless of how or why they arose, your responsibility is to tell your clients what’s going on, and be proactive in trying to address the situation. Otherwise, they will have a good reason to leave.
Good companies don’t stay in one position for too long: They add new updates, evolve with the times and are always searching for ways to do more for their customers. Simply changing your processes and offers from time to time is a demonstration of value, and will keep your customers around longer.
10. Accept feedback.
You don’t know what your customers really need unless you ask. Conduct regular surveys and request feedback from all your clients. You never know what you might be missing -- and what areas need improvement.
Customer retention isn’t something you can switch on at the highest levels of your business as a one-time effort. Instead, it’s something you have to work at and improve, constantly, at the individual level. Every member of your team should work to maximize his/her ability to retain customers, and there should never be a point where you’re content enough to stop improving. It’s an ongoing process, so keep improving.