Four Strategies To Help Small Businesses Increase Customer Retention
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Every business wants maximum profit - there’s no denying that fact. Unfortunately, the most ambitious entrepreneur could be making the biggest blunder when it comes to expanding revenue generation. In fact, a heap of budding startups focus more on business expansion at the expense of the revenue stream. What’s the best strategy to grow a business and the bottom line?
According to the Harvard Business School, a minimum of 5% increment in customer retention rate increases profit by 95%. Meanwhile, acquiring a new customer is 25 times more expensive than retaining existing ones. These figures point out only one fact — businesses must focus more on retention than acquisition.
Customer retention is one herculean business task. To help you out, below are proven tactics to satisfy both prospects and existing customers, earn their loyalty and make more income.
Start with customer knowledge
You can’t retain customers without first bringing value to the fore, which comes by understanding a critical need of a specific market and stepping in to meet that need. Thus, the first step to achieving customer retention is having the right answers to this question: Who are your customers and what do they really want? Once you know this, you have the power to act on their triggers (i.e. pain points, preferences, purchasing patterns, hobbies, demography etc) and to keep hold of their loyalty.
A few ways to increase your customer knowledge:
- Be more active on social media.
- Check what the market is saying. Always.
- Ask for feedback with an open mind.
- Leverage emotional intelligence to enhance engagement.
- Use the right tools to learn more about your customers.
Cement your relationships with customers
You already know what your customers want. Now, how do they feel when dealing with your company? This is where customer management comes in as an essential way to take you from customer knowledge to the ultimate goal—retention.
Technology can always help. With web design platforms like Duda, agencies can simplify many aspects of their customer management with customized account access, easy content collection and automated messaging. You can even pull customers’ existing images, text, and information from across the web and centralize it in the platform. This allows companies to increase their retention rate by delighting customers with a sustainable collaborative relationship that is as stress-free as possible.
Also with tools like Salesforce, you can create a customer relationship management (CRM) system that gives you a clear overview of your customers. You can glean information from their social media activities, learning their likes and dislikes. This helps to acquire authentic insights into how your customers feel and what they are saying about your organization.
Help – don’t sell
At the expense of restating the obvious, people go out in droves only to businesses that help them learn something new or, better still, solve a problem. Gone are the days when business was all about nothing but profit.
Not that selling approach is entirely wrong. The message is that the benefits of help approach is optimal and unrivalled. While selling is a one-time thing, you’ll develop a retention magnet by putting help first. Indeed, the help approach leaves customers with the feeling that you’re investing in them- you’re helping them achieve outcomes. As such, it’s only natural they reciprocate with loyalty.
One of the biggest brands that thrive on this approach is Slack. The company focuses on making customers’ lives easier. The result? Just in five years (2013–2018), Slack has reached over $7.1 billion worth with over 8 million daily users. Bill Cushard can’t be more right, “Companies that get it are marketing to help, selling to help, and servicing to help.”
Use convenience to stimulate loyalty
As more business interactions continue to take place online, customers long, deservingly so, for optimized, seamless digital experiences that align with their lifestyles. This desire cuts across all platforms and devices. A well-designed user interface raises retention rate by up to 200 percent and a better mobile friendly UX design yields conversion rates up to 400 percent, according to this study.
Take Starbucks for example. The “coffee goliath,” as HubSpot’s Sophia Bernazzani calls it, made an innovative customer retention move when it added the in-app Mobile Order & Pay feature. Thanks to this feature, customers don’t have to get to the shop before ordering coffee.