As a business owner, have you ever thought about what could be better than gaining a new customer? You might be wondering if anything could be better than this.
Well, the answer is customer retention.
Gaining new customers is alluring but retaining customers comes at a lower cost and has the potential to provide a higher return on investments.
So the question that now arises is how can businesses retain their customers for longer terms.
To do this, you will have to form a strategy for retaining customers that allows them to stay engaged and content.
In this blog, we will be sharing some of the best customer retention tactics. Best Customer Retention Tactics [Mini Guide + Checklist] will help you to retain your customers. What’s more, we will also discuss how to use software for the same.
So, let us get started...
What is Customer Retention?
"If a customer cannot be retained, then to what extent can you keep acquiring novel customers and let your business go on? "
As the term suggests, customer retention denotes businesses' actions and activities to retain the maximum number of customers. This is commonly done through brand loyalty and customer loyalty initiatives.
When we talk about customer retention, the process begins from the first time a customer makes contact with the company and goes on throughout the whole period of the relationship. Overall aids the companies in reducing the total customer defections.
The key aim of customer retention is to engage current customers to continue purchasing services or products from businesses.
The best strategies for customer retention allow a business to form long-lasting relationships with customers. Their loyalty to the brand may even result in mouth publicity, further increasing brand awareness and building customers.
What is the Importance of Customer Retention for SaaS Companies?
SaaS companies spend money on raising brand awareness through various means, like social media, and thus, acquire new customers. This means that gaining novel consumers is expensive, due to the number of investments involved.
Moreover, if these customers are not retained, the ROI will also be lower.
Why SaaS Businesses Must Retain Customers?
- Customer Loyalty
Customers that are retained tend to spend more and purchase more often as compared to novel customers. This is because the retained consumers understand the value of a service or product and continue to visit repetitively.
- Word-of-Mouth Advertising
One of the most effective ways of increasing brand awareness is through word-of-mouth advertising. When customers share their satisfactory experiences with their friends and relatives, there is a higher chance these people give the products or services a try.
Through this kind of advertising, the companies acquire new consumers, and that too, without spending.
- Higher Return on Investment
Companies that have high customer retention have greater ROIs. If you are thinking about the extent to which this can increase company revenues, here is your answer:
"5% increase in customer retention produces more than a 25% increase in profit." -Fred Reichheld
The major reason for such high returns is that return customers tend to purchase more products from a business over time.
Concerning the profitability of SaaS companies, the expected revenue generation is even higher. Based on research by Swagata Kumar, “Boosting B2B customer retention by 5% increases profits by up to 95%.”
- More Affordable
As stated earlier, acquiring novel consumers requires high investments in advertising, which is an expensive process. On the other hand, retaining an existing customer requires lesser expenditure. If you do not believe this, let’s see what Kate Silver said:
“Most of the research shows that it costs between 6 to 7 times more to get a new customer vs. keeping the customers you already have.”
- Higher CLTV
CLTV or Customer Lifetime Value refers to the overall revenue that an organization expects to earn from every customer.
Since return customers are likely to avail of more services from a company due to their love for the services and hands-on experience, a company with a higher customer retention rate is likely to have greater CLTV.
Customer Retention Process
To retain your customers, there is an entire process that you must follow:
Step 1: Categorize Your Customers.
The first step to retaining customers is through categorizing them based on the following aspects:
- Which customers are driven by prices?
- Which customers seek value?
- Which customers are loyal to the brand?
Once you have categorized your customers, you will know which approach should be used for which customer. For instance, a customer who has a good relationship will require an approach that is less salty.
Step 2: Your Service: ABSOLUTE!
When your services are top-notch, no customer would be willing to leave. Even though they might consider stepping back due to high prices, it would still be difficult for them to leave your company.
So one of the most crucial steps in customer retention is ensuring that your services are as good as you think they are. If you are not sure, conduct surveys and ask for feedback from your customers.
Another essential part of good services is talking the customer into availing services but not forcing them so much that they get irritated. A customer will only return if you keep him content.
Step 3: Remember, Automate it!
Make sure that the systems you use are working for your company. This may include the following:
- A good system for contacting customers
- Automated mailers for season sales including CTAs.
- Reward systems for loyal customers
When you have your systems in place, you can stay in touch with your customers and they are likely to return, considering their liking and loyalty to your brand.
Step 4: Update Your Oldies.
Oftentimes, companies think that they do not need to sell their services or products to old customers and that being a salesman is necessary only for new consumers.
Other times, organizations fear that pressurizing or trying to sell to old customers can make them lose their relationship with them. However, this is not the case.
Even return consumers look for companies to bring them novel offers and ideas. So, as a business owner, you must ensure that you continue to sell to your customers to retain them.
Best Customer Retention Tactics to Ace Your Customer Retention Management
Before we share with you some of the successful techniques of customer retention management, let us first understand what it is.
In the simplest terms, customer retention management refers to the process through which customer satisfaction and customer experience are managed by a company. The key aim of this process is to acquire and retain as many consumers as possible.
The process of customer retention management is led by techniques and strategies that vary from one company to another, based on their segmentation and customer experience goals.
Customer Retention Management Techniques
- Implementing a Feedback Loop
Several companies believe that they serve their customers well but sometimes, this is not the case. It is not necessary that the customers feel the same. So to ensure their retention, it is crucial to understand what they think about your company’s services so you have some scope for improvement.
To do this, you must start getting customer feedback and share the same information with the members of the organization. Through a customer feedback loop, you can collect, analyze, and distribute surveys and reviews that customers undergo.
- Maintain a Calendar for Consumer Communication
Irrespective of the responses of your customers, your company must continue to communicate with them. In case you haven’t heard from them in a while, you must reach out to them and try re-establishing your relationship.
Since you may lose track of days, a customer communication calendar can help you see when a customer last interacted with you.
You can also consider sending them an email regarding the new offers in the store and adding a call to action.
- Encourage Your Customers with a Mission
Not every brand needs to inspire their customers’ loyalty through systems and tactics - some may even inspire through mission, such as TOMS.
The business model of TOMS is entirely based on making the world a better place, which is why several people are loyal to the brand.
Consumers tend to be focused on the environment as well as the impacts of their purchasing habits. This means that doing good is also essential to them, which clearly explains their relationship with TOMS.
Why Should You Use Customer Training Software?
Customer training refers to how the customers are educated regarding the successful utilization of company services and products. This includes providing them with information and materials they need to meet the company's objectives.
The Four Major Aims that a Customer Training Software can Accomplish are as follows.
- Increasing the impact of your products and services.
- Enhancing customer experience
- Augmenting the value of products and services
- Acquiring and retaining customers at each phase of the consumer lifecycle
If you are still not sure why you should use customer training software, the research report by Brandon Hall Group may convince you.
According to the Extended Enterprise Learning 2020 report, 45% of people surveyed claimed that they offer training to the customers actively. 49% of them agreed that it is capable of enhancing client relationships.
Why Should You Use Customer Training Software?
- Enhance the overall consumer experience
- Produce recurring and extra revenue
- Reduce expenses invested in acquiring novel customers
- Enhance client relationships
- Develop brand awareness
- Enhance the value of products and services
- Lowering costs involved in customer support
How to Retain Customers Quickly Using Customer Training Software?
Do the tactics used by your company for customer retention encourage the long-term growth of your business and build trust? Do your products and services receive word-of-mouth advertising?
If the answer to the above questions is not a confident “Yes!”, then you should consider opting for an LMS for customer training to quickly retain them.
A learning management system or LMS aids in the creation of targeted training for customers to enhance the rates of retention. This is because their pain points can be rapidly identified and resolved, which leads to satisfaction among customers.
Key Points to Focus to Implement the Retention Tactics with the Use of an LMS
- Emphasize Your Customers’ Needs
Attract attention to how your services address the pain points of customers. You may use facts, testimonials, infographics, or case studies for the same.
- Monitor Engagement Levels
Through an LMS, you can track and analyze the engagement of consumers. This will further provide you with an understanding of what your customers want the most and how you can engage them further.
- Make Video Tutorials
The key aim of customer retention tactics must be the increment of customers’ knowledge to increase the value of products and services. Thus, through video tutorials, they can engage and understand better the innovative usages.
Why Opt for CXcherry as a Customer Retention Software?
When it comes to choosing an LMS for customer training, CXcherry is extremely beneficial in retaining customers, as well as for the overall ROI of companies.
- Adaptive Customer Onboarding
Help your novel customers to comprehend your products and services and adapt to them more quickly after a customized onboarding.
- Enhance Upsell
Enhance upselling by allowing your clients to realize the actual value of your services and products and hence, obtain a higher return on investments.
- Brand Advocacy
Through an LMS, customers will become brand advocates due to their level of satisfaction.
- Reduce Support Tickets
By educating and informing the buyers with the necessary details about the products and services, you will receive lesser support tickets.
- Boosts Service Adoption Rate
CXcherry helps in boosting service adoption by delivering trackable, comprehensive, consistent, and updated training.
Congratulation!!! You’ve reached here.
Several businesses tend to hesitate when it comes to opting for new software or strategies for better overall functioning. However, it is crucial to understand that stepping out of your comfort zone can sometimes be highly beneficial.
In this case, adopting CXcherry for customer retention can reduce expenses to a great extent along with giving high ROIs.