We hear about customer retention all the time, but how many of us really pay attention to what it means? Customer retention is the ability of a business to retain its customers over time. High customer retention means customers of the business continue to return and make purchases from the business. If your business struggles with customer retention, that means you’re losing valuable customers (and in turn, revenue.)
Customer retention is not just important, it’s necessary if a business wants to grow and succeed. Keeping your customers around is five times more valuable than acquiring new customers. However, many businesses still focus solely on bringing in new business. Is there something wrong with bringing in new customers? Of course not. All loyal customers were once new, after all. But truthfully, a business is better off spending their marketing budget and time focusing on retaining their current customer base.
So we know what customer retention is, but what do businesses need to do in order to effectively retain their customers?
Engage and Create Connections
Create strong connections to your customers through effective engagement. Your customers should hear from your business on a regular basis. Engagements sent to customers are primarily through social media, text messages and emails. Avoid spamming your customers by focusing on messaging that is worthwhile and informative to them. Customer engagement is one tool that business owners really can’t thrive without in today’s world.
“Hey, Jessica! We noticed it’s coming up on 6 months since you’ve had your carpets cleaned. Call us today to book your next cleaning, and we’ll give you 5% off!” is much more personal and friendly than, “We clean carpets! Don’t forget to call us next time you need quality carpet cleaning done in your home!”
People want to feel heard and understood by the businesses they work with. The best way to meet this expectation is through personalized interactions that show you care about your customers. Retain your customers by simply getting to know their name and what they need from your business.
For many small businesses, specifically those in the home-services and pest control industries, people are asking you to come into their home to complete a service. For those businesses in the automotive industry, people are trusting you with one of their most expensive investments. It’s important that consumers know they can trust you. Of course, you can build this trust through your quality of work and the knowledge you have surrounding what you do. To go the extra mile and really build trust with your customers, get to know them. Make them feel like they’re involved in the process and understood. Keep in contact with your customers through meaningful engagements to show them that the relationship you have is valuable to you and your business. Building trust with your customers pays off and is a huge factor in customer retention.
Customer retention means keeping customers around and providing them with the services they need from your business over a long period of time. If you see that your customers are only using your business once, or you begin losing customers to your competitors, focus on the tips mentioned above and see how high your customer retention rate becomes.
For more insights on marketing strategy that actually works for small business, connect with Jay Bean, Founder of FreshLime and Small Business Marketing Expert on LinkedIn and Twitter. If any of these tips have helped you or if you have anything to add, please comment below. We’d love to hear from you!