What is Customer Retention and How to improve that?

Hey guys, welcome back to this new post. In this post, let us explore the term Customer Retention. If you have been associated with startup ecosystem, then I am sure you would be hearing this term a lot by now.

What is Customer Retention?

Customer retention as the name suggests is an ability of an organisation to engage with its existing customers in order to maintain repeat purchases from them and also prevent them from switching to another competitor.

Why is Customer Retention important?

The simplest reason as to why it is important is because of the well known fact that,

  • Acquiring new customers is 10x more costlier than retaining existing customers.

  • More you are able to retain your existing customers, the more you get the validation of your product market fit.

  • If you keep existing customers happy, slowly they turn into evangelists and it can lead to word of mouth marketing.

Now the question arises, how do a business retain their customers for longer in spite of growing competition with similar products and services offering. Here are some ways using which you can improve your customer retention.

How to Improve Customer Retention?

  1. Give best Customer service.

The best way to keep your customers happy is by providing the best support and service whenever they need it the most. Strive to solve customer tickets and queries with best possible turnaround time. Faster you revert to your users, the more satisfied they are.

  1. Personalize your conversation.

With the advent of technology, every organization is trying to personalize their conversation with the customers as per their context. This saves time for both customers as well as your own staff and leads to higher customer satisfaction. A person always feels more empowered when the conversation is about him and his context compared to a generic conversation.

  1. Regularly Engage with Customers.

If you are not regularly engaging with your customers, then it is highly likely that you will be forgotten early. This may lead to early defection of customers. The more you interact and engage with your customers, more they feel you are alive and care about them. This also gives them an impression that you are constantly working to improve your offering and hence customers are likely to benefit from their long term association with your business. 

You can use any channel to engage with your customers such as email marketing, social media or anywhere your customers are present.

  1. Take Feedback and Suggestions.

Taking regular feedback and suggestions from your customers shows that you value your customer experience and are striving hard to improve that. With this, customers feel more empowered since their voice is getting heard.

Ofcourse, as a business with limited resources, you may not be in a position to straight away go ahead and implement every suggestion. But you can always use the 80-20 rule to arrive at the 20% of recommendations which can bring in 80% value.

  1. Monitor your Retention metrics.

In business, there is a saying that if you can't measure it, you can't manage it. Though it's debatable, it still holds good in many aspects of business. Bring in systems to regularly track and monitor your Retention metrics. This will let you uncover many gaps which are leading to customer defections. Fixing them overtime will automatically improve customer retention.

Hope you liked reading this article. If you are looking for a CRM software to improve your customer acquisition as well as customer retention. Feel free to try out ToolsonCloud Sales CRM.