How You Can Improve Your Business’ Customer Retention Rates

How You Can Improve Your Business Customer Retention RatesSource: Pexels

As every business owner is all too aware, without customers, you have no business; it’s that simple. When your new business launches, your focus will be on raising awareness of your brand and trying to attract customers. As your business grows, you face the double challenge of retaining existing customers and expanding your customer base by attracting new ones too. This challenge can be a little more complicated as you want to offer promotions that incentivise new customers to join you. However, you don’t want to alienate existing customers who feel they are missing out on the best deals. Finding the best ways to attract and retain customers is central to every business. This is the reason that such vast sums of money are spent each year by companies on advertising and marketing.

1. Why Customer Retention Matters

If retaining customers is something that your business is struggling with, you may feel confused about why this is happening and how you can resolve this issue. Retaining customers is vitally important for your business’ long term success, so understanding how to keep hold of them is crucial.

Building up a relationship with your customers and keeping them coming back for more, is far more sustainable than continually trying to attract new ones. Every business wants to grow its customer base. However, ignoring the fact that you have already got people who are willing to spend their money on your products is a big mistake.

Customer acquisition can be extremely costly, and many businesses allocate far more of their marketing and advertising budget on customer acquisition than for customer retention. Research shows that it costs five times more to attract new customers to your business than it does to retain your existing customers. This fact highlights the importance of customer retention for reducing your advertising costs, as well as sustaining the future of your business.

2. Understanding Your Current Position

Before you take steps to improve your customer retention rates, you will need first to gain a thorough understanding of your current position. Examining how many of your sales come from returning customers and how many from new customers is helpful. Analysing your return on investment from marketing campaigns focused on customer acquisition, versus campaigns focused on customer retention will also provide valuable insights. Understanding the success of your current campaigns will help inform your future efforts.

3. User Experience Insights

In today’s digital world, customers have greater choice than ever before. The advent of online shopping means that consumers can buy from around the globe at the click of a button. For businesses, the world of online shopping and the array of choices that it brings means that attracting new customers and retaining new ones has become harder. So, how do companies ensure that consumers purchase goods from their website rather than a competitor’s? This is where user experience, also known as UX comes into play. Using UX research methods will provide detailed insights into how your customers interact with your business’ website. Understanding user experience can provide insight into all those unanswered questions you may have about your site, and how your customers use it. The answers that the research offers can help you to pull together a robust plan to overcome the issues highlighted. User experience research can clarify why you have so many abandoned shopping baskets at checkout, or why visitors only spend a short time on some pages.

4. The Customer Journey

If you are committed to improving your customer retention rates, then you will need to understand how your customers feel about your business. The customer journey is a useful way to gain this understanding and will help to identify critical areas that your business needs to improve.

How You Can Improve Your Business Customer Retention Rates

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The customer journey is a map that follows every stage of the interaction between your customer and your business. The customer journey map starts with your customer initially interacting with your brand. This initial interaction is how your customer enters contact with your business. This initial contact could be through an email referral, social media, or simply finding your business via an online search. The customer journey continues right through them browsing your products, making a purchase and after-sales service.

The value of customer journey mapping lies in its ability to gain an understanding of your business from the customer’s perspective. The information provided by the customer journey offers the chance to see where there are gaps in your customer service that could leave your customers dissatisfied and lose sales.

Customer journey mapping, combined with user experience research, will provide a detailed insight into the current experience that customers receive when they shop with you. This information provides the knowledge that your business needs to understand how you can overcome issues that are losing you sales and why customers choose your competitors over you.

5. Improving Customer Service

Along with inferior quality products, poor customer service is one of the major turn-offs for customers. Bad customer service is not only likely to lose you customers, it is also likely to damage your reputation too. Negative reviews and ratings online are there for everyone to see, including potential customers.

Luckily, there are several ways that you can improve your customer service and keep your customers happy. Many businesses are now implementing customer relationship management (CRM) systems to facilitate excellent customer service. The beauty of CRM systems is their ability to record details of each contact that a customer has made with the company. This means that if a customer has a complicated issue which needs to be resolved they won’t need to re-explain the problem over and over again each time they call. Instead, the call operator will have that information to hand, along with the customer’s details, so will be able to solve their issue promptly.

Your business’ ability to retain customers is made up of many factors. To improve customer retention, a holistic approach is needed to help you understand your customer’s needs, and improve on the customer service that you provide.