How to Increase Customer Retention?
Did you know that it’s five times more costly to get new customers than to keep an existing one? Most businesses focus more on customer acquisition than customer retention, and it might be compromising them. In fact, research shows that the probability of selling to an existing customer is between 60 and 70%, whereas that of selling to a new customer is between 5 and 20%.
What is the difference between customer acquisition and customer retention?
Customer Acquisition is the process of bringing new customers on board. It involves launching marketing campaigns, cold calling, and other steps you may take to acquire new customers. You can calculate the Customer Acquisition Cost (CAC) by dividing the cost of sales and marketing by the number of new customers acquired.
Customer Retention, on the other hand, is the process of keeping your existing customers. You can calculate the Customer Retention Rate (CRR) using the CRR formula; CRR=[(E-N)/S]x100 where S represents customers you have at the start, E represents those you have at the end, and N represents those acquired during the time period you are measuring.
Businesses often rely on acquisition channels such as emails and social media platforms to attract new customers to their brand. However, once a customer has already converted, your most important role is to keep them. This is usually done by showing your customers a trustworthy, loyal and satisfactory brand.
Here are 4 customer retention strategies you should integrate in your business.
1. Create a positive customer experience.
As we’ve covered in our article “How to Boost Customer Satisfaction”, it is crucial to deliver a positive customer experience. This stands for both customer acquisition and retention. However, once a customer has already converted, it is important to remind them that your brand offers a positive user experience that includes accessibility, value, and usefulness. Creating positive customer experiences can vary from choosing different fonts to improving search speed or offering a loyalty program.
2. Appreciate your repeat customers.
With the eCommerce market being saturated, you are sure to have at least one competitor out there, and your customers might decide to switch over. Appreciating your customers and displaying gratitude goes a long way if you are looking to retain your existing customers. You can do so by thanking them, giving them rewards, special discounts or even a shout-out on social media.
3. Connect with customers on social media.
Spotlight your customers on social media by sharing their stories or testimonials. Doing this enhances your social media and is a good marketing strategy to attract new customers, and it also makes your existing customers feel heard and appreciated.
4. Make Purchasing Easy and Desirable.
Most online shoppers look for quick and easy solutions to make a prompt purchase. Consider integrating free shipping, multiple payment options, mobile-friendly checkouts and one-page checkouts into your website to deliver an easy purchasing solution.