Summary — All about customer retention strategy
Know about the professional customer retention strategy that will help you grow your business with ease. You will learn ways to measure, track and improve it.
Introduction — Different customer retention strategies to explore
Retaining customers is one of the most complex and time-consuming business processes that are important and you can't overlook it. Whether you are into an ECommerce business or running an enterprise, it's pivotal that you know certain powerful customer retention strategies to keep growing your business.
Earlier, the scope for customer retention was far limited due to a lack of tools, tactics, and strategies. But today, there are several easy and performance-driven strategies that help you take the lead.
What You Will Learn — Robust strategies to grow customers
In this post, you will learn multiple robust strategies that you can use to improve your company's customer retention and how to grow your business seamlessly. We will walk you through multiple strategies that you can implement, along with how to measure, track, and improve the overall customer base.
Prerequisites – What you need to know before
Before we get started with customer retention strategies, first you need to know about what exactly is customer retention.
It is a process of retaining your existing and new customers using tactics like email newsletters.
Along with newsletters, you also need to know about how to implement reward systems for your customers that can attach and hook them to your company.
Throughout the post, we will check different methods to grow customer retention rates and ways to measure and improve them.
Customer Retention Strategy — Let's get started
Personalized email newsletters
The first and the most important tactic that you can implement to retain and grow your customers is using a personalized email newsletter. Instead of sending a generic newsletter, go the extra mile and send a personalized offer newsletter that will make them feel more important and special. It's seen in various studies that sending personalized email newsletters can drastically improve the retention rate as it shows that you care for your customers.
Regardless of whether you are an ECommerce company, or you provide services like SEO reseller or others across the globe, try to improve as much as possible personalization in the mail. Some of the common aspects of personalization are including the customer name, highlighting their previous purchases. The most important tip is to include personalized offers for customers that they can't resist. When you offer some special discount coupon that is available only for them, it creates exclusivity among customers.
Recover your churn rate
Along with pampering your existing and new customers, it's important that you take care of the customers who have stopped shopping from your brand. This strategy gives you the advantage of reviving the older customers who have either stopped shopping or the number of orders that come from them is very low. Many businesses overlook the fact that they can still generate business from their older customers just by saying a simple hello and proposing some good deals to them.
For doing this, you need to first check out your Google (News - Alert) Analytics and sales dashboard. You need to explore demographics that have the lowest interaction with your brand in the current times which was high in the past. Once you figure out those customers, you need to communicate with them via any suitable medium or run ads to attract them to your business again. Try to analyze the reasons why they are not coming to your company anymore. Work on those factors to start getting traction from them.
Have a reward program
Reward programs are helpful for all businesses regardless of their size. You don't have to give rewards to anyone who is shopping with your brand. The pro tip here is to create exclusivity for your business and reward only the best customers. This smart tactic will motivate other customers to avail themselves of the special offers by shipping more. If you're confused about what reward program to have, you can perform quick competitor analysis and see what they are doing.
Once you prepare the reward program and it's activated, you can send a newsletter for the same and let all the existing and new customers. It will create more hype for your brand and more customers will try to avail themselves of the special rewards. Keep changing the reward programs so that it will retain the excitement among customers to explore your offerings.
How to measure the retention rate of your customers
Customer retention is not a one fit or a one-time activity as you need to keep checking and optimizing it on a constant basis. Your team needs to monitor it closely to make new strategies that will drive value to your business. To make this process easier and quicker to manage, many companies leverage customer retention software and tools. These tools help them monitor retention, understand their buyers' persona, and take the necessary action. When you take actions based on the data, you get more ROI for your company.
The very first step towards this is to calculate your customer retention and it's easy to perform. The customer retention rate in simple terms is expressed as a percentage of buyers retained in a specific period of time.
Formula for retention rate — ((CE-CN)/CS)) X 100
CE — Customers at the end of the period
CN — New customers gained during the period
CS — Customers at the beginning of the period
For example, if you had 10,000 customers at the starting of a quarter, and you acquired 2,000 new customers during the quarter and had 8,000 customers at the end of it, the retention rate will look like this:
((8000-2000)/10000)) x 100 = 60%
That means over the quarter you retained 60% of your existing customers.
Tips to measure and monitor customer retention
Here are few tips that you can use to measure and monitor the overall customer retention of your business and keep everything under your radar.
Track customer retention in real-time
It's important that you track customer retention in real-time and improvise the strategies accordingly. The easiest and only way to do this is to keep track of the customer churn. It's up to you how frequently you want to measure the customer retention rate. Some companies prefer to perform it quarterly, or annually. However, if you want to gain an edge and over perform competition, then you have to perform this activity more frequently.
You can hire a dedicated team who will be responsible for measuring all the metrics and give you real-time reports on a weekly or even daily basis. It will help you optimize the decisions much easier and boost sales easily. There are also several tools available that help you monitor real-time customer retention in an automated way.
Bottom line impact
It's important that you understand the bottom-line impact to figure out how much churn rate is acceptable for your company. Along with this, you also need to figure out what customers you can let go and you will keep progressing in the business. For doing this, you need to have the complete operational data that specifically shows customers are churning.
You can take the help of metrics like CLV or customer lifetime value to evaluate which customers you want to retain that will give you the maximum benefits to your organization. This process will give you clarity about the ideal demographics so that you can focus on building a similar customer base in the future.
Understanding churn reason
It's pivotal that you find out the core reasons and motivations behind customers leaving your brand and going towards competitors. There could be several reasons like high prices, wrong customer targeting, service issues, or limited after-sales service. You need to figure out the core reasons and start working on them to recover as much as possible.
You can't get all the customers back but even if you manage to get a fraction of it, then it's a bonus for you. One thing to keep in mind is that don't spend too much time trying to regain lost customers. Instead of this, focus on building new customers that match your services excellently.
Share the insights
Once you gather all the relevant and decision-making data, it's the right time to share the key findings across the organization among the relevant people. It could be your sales team, operations team, support, or product team who needs to see the data. Brainstorm over the findings and take firm decisions that will add more value to your operations and the overall business.
You can share data via a presentation, or share access to the data management dashboard with all the respective individuals. Implement your findings to grow business at scale and boost the overall profitability.
Conclusion — It's time to retain more customers
Get started with these above tips and thrive online with more sales, new customers, and higher profitability. Customer retention is an important aspect of business that you can't overlook. Get started with data and focus on customer growth.
Author Bio -
With over 13 years of experience as a leader in digital marketing, Mansi Rana is Managing Director of EZ Rankings. Passionate about all things data; providing actionable business intelligence in digital, future tech; and venture bubbles categories for everyone, everywhere.
