Why Customer Retention Is the Most Effective Way to Grow Your Business
Customer retention is challenging.
When customers don’t repurchase your product or service the next month, you may need to consider the big “why.”Most analyses determined it’s because of the customer’s non-satisfactory experience.It takes 60–90 days to onboard a new customer. And sometimes even more. A mere 5% increase in customer retention produces more than a 25% increase in profits.
So what would you choose: spending time chasing and finding a new customer or retaining an existing customer by providing them with memorable customer satisfaction?
If you go with the latter, there’s a problem: most startups know how to convert their first set of customers. But keeping them seems next to impossible.
In this article, we’ll take you through the different possibilities customer retention brings and the four customer retention strategies you can implement in your business.
Let’s dive in.
Why is customer retention important?
Most startups aim to onboard new customers and get on client calls. But here’s the thing: retaining a customer is much easier than onboarding a new customer.
That’s why comparable brands focus on maintaining their existing customers instead of chasing new ones. For this customer retention software and Ad agency management software comes into play. There are also several types of press releases that you can use to keep your customers updated and engaged in the news you have to share.
While a single reason may not be satisfactory, let’s understand why customer retention is important for your startup:
- It saves you money. Retaining a customer is easier because you *already* have a customer base that doesn’t need a hefty marketing budget.
- It increases ROI. The ability to retain customers is directly proportional to your company’s revenue.
- It brings repeat customers. Brands with loyal customers get repeat sales because the brand provides them with a great customer experience. However, brands that offer paid loyalty programs see 60% more loyal customers that spend and purchase from them.
Customer retention strategies you can implement
Here are four customer retention strategies that you can start implementing today:
1. Highlight your tailored solution
Imagine a customer opts out of your product, thinking it doesn’t have the features they are looking for.
The worst part? They weren’t aware of all the solutions your product offers. And now you’ve lost a valuable customer.
There are two ways to prevent this:
Create a dedicated solution page
List down all the features of your product to showcase to your customers how you can solve their problems. This helps them understand you are the right solution for their business compared to your competitors.
For example, Samsara has a dedicated solutions page displaying how their products are the best solutions for driver operations, government fleet management, site visibility, and much more.
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Why it works: Samsara has a navigation bar on their website where they have created a dedicated ‘Solutions’ page based on industry and relevant business needs. When customers click on their solution page, they can check the relevant category based on their requirements and see how the product helps them.
In the example above, they add a CTA “guide to retaining customers,” which directs the customers to a new page. There they discuss various product features and share customer stories with results.
Key takeaway: Create a solutions page with clear graphics. Highlight the key benefits the solution brings the customer and add a single CTA — which directs the customers to a new page that gives more details on the same solution.
Give them a video demo
Offer them a live video demo or a website video demo highlighting all the features and solutions your product offers.
If it’s a live video demo, ask your customers questions that help you pinpoint their day-to-day pain points. Then during the demo, emphasize the exact pain points and how your product solves them.
Pro tip: Don’t just offer live video demos to anyone. That’s a significant drain on your resources. Use lead scoring software to prioritize qualified leads that are more likely to convert into loyal customers.
If it’s a website video demo, ensure the video is professionally shot and placed on the top of your website — so it’s visible to the customers.
Here’s how Trello has embedded a video at the top of their website with the CTA to “watch video.”
2. Create a customer loyalty program
Customer loyalty programs are a simple way to reward your customers by giving them incentives and rewards to invite and encourage them to shop with you.
These programs are the foundation of building customer relationships. The concept is simple: you give them something they consider valuable (discounts, freebies, early access), and in return, they buy from you.
A 2021 Customer Experience Trends Report shows that 75% of customers make purchasing decisions based on their experience with the brand. So, as a brand, it becomes crucial for you to enhance your customer experience.
Look at how Paperwrld has created a three-step loyalty program where customers advertise their products and earn a commission.
Why it works: They have created a separate loyalty program page on their website, which helps the customers to easily access it. With the minimalistic graphics, they shared their program details with the CTA “join now.”
Paperwrld can reach more people while helping its customers earn a 10% commission on every purchase made through its discount code. Plus, this strategy helps tap into word-of-mouth marketing.
Key takeaways: First, plan your loyalty program — what you want to offer your customers and outline it. Next, create a referral program page and add it to your website’s footer. Use simple and easy-to-scan text to highlight the process of your loyalty program. Include a single CTA at the end to encourage them to join.
3. Be active on social media
Most customers use social media to purchase products and services, influencing brands to activate their social media presence.
In fact, 75% of internet users use social media to research products. And if you aren’t present on the social channels your customers are present on, you are missing out on your high-impact revenue.
Being active on social media helps you create a sense of community and increases customer loyalty and retention in the long term.
Create a Social Media Marketing Strategy and a content calendar. To create content assets like eye-catching images and carousels for social media, use a photo editor online for best results.
Once you have your content ready to go, start publishing customer-centric content using a social media scheduler to take advantage of the time when your followers are most active.
Don’t stop after you hit publish. The goal is to engage with your followers to show that you care.
Take a look at how ClickUp engages with their users who mentioned them in the tweet.
Why this works: They’re active on each social channel where their customers are present. They consistently publish content and engage with their audience.
Their social listening game is on point. They engage with their customers in their tweets when they see them mention them. This shows how interactive and appreciative they are of their customers.
Key takeaway: Use social listening tools and engage with your customers.
Best practices to create content on social media
- Research your audience first. Ask yourself: where do my customers spend most of their time and activate your social presence on those platforms first?
- Develop a realistic social media strategy that focuses on SMART goals and stick by to achieve your goals.
- Create a social media calendar that focuses on the content and formats you want to publish.
- Observe what people say about your company on social media: do they complain or give feedback? Engage with them and improve their customer experience.
- Study the analytics of each social channel and tweak your strategy accordingly.
4. Establish a better customer onboarding experience
Imagine you find a set of headphones on Amazon. You can click add to cart and then pay now. The app shows an order placed, but what’s next?
- How do you receive your product?
- Where do you check the order details?
- How do you track your order?
- Who do you contact if you face problems with the order, and how?
Along with answering all these questions, giving new customers quality customer service and perks is a great strategy to increase retention and engagement. For this, Amazon partners with a courier service that assists with quick deliveries — even two-day and same-day delivery. That’s what they promise on their website, too.
But what if they couldn’t deliver on their promise? Customers end up frustrated — impacting your brand’s credibility and turning them into a one-time customer. That’s where proving a great customer onboarding experience becomes a necessity.
With a better customer onboarding experience, you make the new customers comfortable with your product and help them navigate the platform or the product with the help of demo videos, step-by-step text guides, etc.
Look at this customer onboarding email by Saleshandy, where the onboarding specialist sends the email to the customer.
Why this works: The onboarding specialist introduced themselves through the subject lines and sent a simple, no-media email. The email is short, concise, and to the point. To help the customer get started, they link a product guide so they can easily navigate the platform.
Key takeaway: Hire an onboarding specialist and automate your email marketing process with a welcome email and a follow-up email. Write a short email and include guides and video tutorials. If you can’t hire a specialist, simply automate the process with an email marketing platform like Convertkit and track the KPIs.
It’s time to level up your customer retention game
Customer retention is all about building meaningful relationships.
It starts with interacting with your customers and understanding their experience with your brand.
If they offer feedback on something that’s not working, try to implement the necessary changes to build the best possible experience. This practice is common among top auto insurance companies, such as Progressive Auto Insurance, who focus on customer reviews to enhance their products and services for their customers.
Loyal customers are the key to your business success. They stick around longer and are more likely to make repeat purchases and turn into brand advocates.
So what are you waiting for? Shift your focus to the customers that are right under your nose. They’re more valuable than you think.