Your business works hard to attract customers through various marketing, social media and branding strategies. With the resources you’ve invested in to gain customers’ trust, it makes sense why you’d want to hold onto them.
That’s why you need a strong customer retention strategy focusing solely on this business goal.
To improve customer retention, you need to analyze your customer experience. How do your customers feel when they interact with your brand?
Various factors can affect your brand’s relationship with the buyer regarding customer interactions. With that in mind, here is everything you need to know about client retention.
What Is Client Retention?
Client retention is the goal of retaining as many clients as possible. Essentially, it’s all about building relationships with existing clients, providing them value and a memorable experience in every interaction.
Client retention is also about meeting expectations and building loyalty so that you encourage them to return for more purchases.
With that loyalty, you’ll be able to offer them even more value throughout your relationship with clients. This aspect of the client relationship rewards you with more spending at a higher frequency.
In turn, you increase the customer’s lifetime value, the total revenue you earn from each client during your entire business relationship.
Source: www.statista.com
According to one survey, 27.8% of respondents said customer lifetime value was one of the main indicators they use to measure their customer experience performance. However, you can’t achieve great results without building trust.
Increased rates like customer lifetime value and client retention are part of your company’s profitability, which is why these measurements are so important.
Once you measure client retention, your organization can use this feedback to perform data analysis on your client’s success.
Why Is Client Retention Important?
Client retention is important to most organizations, even private institutions. For example, they’ll use strategies to keep their clients happy because it’s more cost-effective to do so than to recruit new students.
That’s because you don’t have to spend all your resources such as marketing, advertising and sales outreach to keep existing clients. They already trust your brand and new clients often require convincing and interactions before the initial sale.
Aside from customer loyalty giving you repeat business, loyal clients are also likely to hand out free referrals to family, friends and colleagues. Building this cycle of retained clients and word-of-mouth marketing is one way your organization can cultivate long-term success.
Overall, improving client retention helps you save money, create buzz for your business and increase your bottom line and customer spending.
How Do You Calculate Your Client Retention Rate?
The client retention rate is the percentage of clients your company retains over time. It accounts for the number of new clients you attract alongside the number of clients who’ve churned. Churn relates to clients who stop purchases, cancel contracts or subscriptions, etc.
To calculate your client retention rate, you can use the following formula.
Client retention rate = [(number of clients at the end of the period – number of clients added over the duration of the period)/ number of customers at the start of the period] X 100
A good client retention rate varies by industry, but if yours increases over time, you’re on the right track. Otherwise, you can use this data to make better decisions and improve your client retention rate over time.
Source: www.marketingcharts.com
One survey found that 47% of marketers use data-driven personalization to improve their decision-making process — vital for increasing client retention and customer experience.
Top Client Retention Strategies to Help You Improve Retention Rates
Improving client retention also means you’re improving your customer experience. A good customer experience is more important today than it was a year ago. It’s the key to company loyalty and profitability for your business.
If you want to improve your client retention rate, here are a few strategies to help you increase it.
1. Provide Value With Every Client Interaction
One of the best ways to keep your clients returning is by maintaining their satisfaction at every stage of the buyer journey. This means you need a strong customer service strategy that involves delighting your clients to influence their purchase decisions.
One of the ways you can do this is by creating a memorable experience. You can start by getting your team involved in establishing the client service vision, goals, mapping out their customer journey and optimizing every step.
Collecting feedback will help you continually improve by measuring and tracking your results.
2. Create Personalized Interactions
To provide quality client services, you must tailor your offerings to your client’s individual needs. Many customers often feel frustrated when they take repetitive action to explain an issue.
However, you can create a more personalized experience by automating your customer service. Using this strategy increases efficiency, allowing you to serve clients faster. Yet, automation also allows you to perform this service without losing the personal touch.
A few examples of automated client service include:
- Routing emails to a representative.
- Providing a good first impression.
- Reducing turnaround time for responses.
- Helping customers feel valued.
- Making your team more efficient.
3. Provide Omnichannel Support
Chances are you have clients who prefer different channels of communication. With omnichannel support, you can empower your clients by allowing them to choose the medium they like most.
Providing this type of experience will likely increase your client retention. That’s because you’re reducing the friction between the client and their effort to reach support. In turn, you’re growing their time efficiency by enabling several ports of access, including:
- Website
- Phone
- Live chat
- Social media
Source: www.statista.com
According to Statista, 39% of customers stated that phone call support was their preferred communication channel. Of course, this will vary by industry. Therefore, it’s always important to survey your customers and find out the communication channels they like best.
4. Gather Feedback Consistently
Customer feedback is a powerful tool to increase client retention and reduce churn. When you conduct surveys, you give customers a voice and all clients want to be heard. It’s the best way to maintain their satisfaction.
Ensure you ask questions that get to the root of your customer’s issue. You can receive important information telling you where you need to improve in the customer journey.
5. Reward Customer Loyalty
Incentivizing your customers for their loyalty is an excellent feature to have in your company. Clients appreciate it when you give them a reason to stay. Consider implementing a loyalty program, discount codes and special offers.
Offering rewards will help motivate your customers to return for more purchases. Plus, it provides a positive, customized experience, which is crucial for increasing your customer retention.
Reaching Client Retention Success
You have various ways to achieve client retention success. Ensure you build a strong customer retention strategy that aligns with your business objectives. Doing so will help guide your efforts and guarantee better results in the long run.
About the Author: Eleanor Hecks is editor-in-chief at Designerly Magazine. She was the creative director at a digital marketing agency before becoming a full-time freelance designer. Eleanor lives in Philadelphia with her husband and pup, Bear.