Customer Retention Is An Easy Way To Save Money Long Term

Customer retention pays off. Research shows that keeping an existing customer is almost five times cheaper than acquiring a new one.

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As a prospective customer, a company courts you with attention and showers you with promises. But after you make a commitment, the honeymoon ends if you eventually feel like a neglected spouse. Where did all that attention go, as an existing customer no less? Proper customer retention is about never letting things get to the breakup stage.

“Businesses focusing on retention benefit from a more loyal customer base, more word-of-mouth referrals and increased customer lifetime value,” said Guy Marion. He’s the chief marketing officer at Chargebee, which helps companies manage customer subscriptions.

Not surprisingly, organizations often neglect customer retention because they have a wandering eye and are focused on finding new customers. New customers are sources of growth, but don’t neglect the ones you’re already in a relationship with.

Treat A Customer’s Time As Gold To Enhance Customer Retention

“The most important piece of advice I have is that the customer’s time is just as valuable as their money to them,” Marion said.

Customer service has long been a problem in every industry, he says. That’s why loyal customers will leave you cold for a competitor if your customer service is lacking.

We’ve all experienced being trapped in a “funhouse maze” of interactive automated voice response options, none of which help us. Who among us hasn’t hung up on a few obstinate robotic voices?

And we’ve all also suffered through inordinately long wait times on hold in a last-ditch desperate attempt just to speak to a live human being.

These are some of the pitfalls that lead to a lack of customer retention, Marion says. “Improving customer support is a top strategy to keep customers happy and engaged,” he said.

Some ways to improve: Make sure your automated voice response system isn’t frustrating customers by thoroughly testing it internally. Communication options given to customers must be clear and helpful. Also, make sure it’s easy to reach a live person who is knowledgeable and speaks clearly.

Offer Incentives To Increase Customer Retention

In an age where retention has become so important, businesses have begun to offer incentives to reward loyal customers, Marion says.

“Rewarding customers with incentives is an excellent way to earn their loyalty in the long run,” he added. These incentives include customer discounts and the bundling of services or products to give more for less.

The use of bundling has also become part of a retention strategy since it can enhance core offerings, increase order value and improve customer satisfaction, Marion says.

Meet And Know Your Core Customer

The process of understanding your customers for retention purposes takes effort, said Jordan Schenck. She’s the chief brand officer at Flashfood, an app that saves consumers money on groceries.

Schenck asks whether you know, for example, who your customers follow on social media? Or what their favorite news sources or newsletters are? What you’ll want to know about your customers will differ for every company. But the more pertinent information you gather, the more you’ll know what matters to customers and how to talk to them. Doing so supports retention.

Utilize online surveys and conduct interviews with groups of clients to discover how you can better serve them.

Develop Content To Celebrate Customers

Schenck finds creating campaigns or contests that result with real customers connecting with the brand to be “incredibly impactful.”

She created events where people drove hundreds of miles to support and be a part of the brand, she said. Then, “We amplified these efforts by producing content about their journey,” she added.

Schenck says it’s up to you, though, to get the word out to customers. She sends messages on social media and emails her customer base. From there she has found fans often take it upon themselves to help share their love of the brand.

“Building retention comes down to creative ways to engage with customers to build advocacy — that are beyond your product,” she said.

Retain The Customer Retention Focus

Retention becomes all the more important if, or when, the economy slows down and corporate budgets tighten. It’s always best to bet on retention, Marion says.

“Customer retention is a more direct and efficient approach to long-term growth that places customers at the center of business,” Marion added.

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