How Can Start-ups Ensure a High Retention Rate in their Business?
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Research conducted by the Gartner Group indicates that 80% of a company’s future profits will come from 20% of their existing customers. Nurturing and cultivating your current customer base is vital to your company’s future success.
So the question is, what do we need to do as leaders to ensure that we have high customer retention rates?
We have to begin top down. We need to instill a culture of being customer-centric throughout the organization. For example at Stage 3, we don’t have store managers but customer experience managers whose job it is to be the customer’s guide and stylist at the store. Many companies are known for being customer-centric. One which stands out is Amazon. In spite of its size, it manages to deliver exceptional customer service and set a benchmark for e-commerce companies worldwide.
Beyond culture, companies need to invest in knowing their customers better than they even know themselves. Great examples of this are Netflix and Pandora whose recommendation engines are well known for providing hyper-personalized user experiences including content recommendations that their customers love. Investing into customization and personalization technologies goes a long way. Though this means interpreting and aggregating trails of data, the investment will always pay off.
Besides traditional customer loyalty programs, small, personalized gestures go a long way in gaining and reinforcing a sense of exclusivity in the customers’ minds. The gesture need not be discount-intensive or cost-intensive for the business. Something as simple as reaching out to wish customers on their birthday, allowing them to preview beta features, shout outs on social media, or exclusive introductory prices on new products work wonders. In today’s highly digital age and despite the convenience of apps and technology, personalized gestures tend to reinforce the idea of a human touch behind the screen, and play a significant role in retaining customers.
Finally, it is important to be accessible. Companies need to make it as easy as possible for customers to reach them. In fact, as per a study by Lee Resources International – customers tend not to voice their problems with products and just leave. For every customer that voices a concern, there are 26 who don’t, which is why it’s important to maintain regular communication with your customer. Social media and messaging apps have made communication much easier and allowed a level of immediacy that was not possible before. Socializing with customers and getting feedback online, on a phone call or via a store visit and acting on the feedback goes a long way in building a strong relationship with your customer base.