Improving customer retention is about the numbers. Customer retention refers to how many customers didn’t come back over a certain timeframe, in comparison to how many customers stayed with you, excluding new customers. Keeping retention levels up where you want them can be increasingly complex as customer interaction channels are more multi-faceted than ever. The experience of experts and leaders in the field of customer retention can offer some valuable insights into hanging on to your precious buyers.
1. Move Beyond Customer Satisfaction to Improve Customer Retention Levels
It’s a common belief that customer satisfaction is linked to customer retention, but many studies suggest this may not be a strong truth. Lior Arussy, creator of Strativity Group Inc., and recognized expert in customer experience, said that when customers from financial institutions who said they were satisfied were asked about their likelihood to consider an competitor’s offer, 83 percent said they would consider it (and these are satisfied customers). It’s your buyers’ actual behaviors, says Arussy, that are a stronger indicator of customer retention. If they come back repeatedly, if they will pay for your product when the price fluctuates, and if they’ll tell their friends about you, these can be indicators that you’ve moved past customer satisfaction and into customer retention.
2. Focus on Total Experience, and Employees, to Improve Customer Retention
Whether or not your employees stay at your organization carries research-backed strength as a customer retention strategy. A recent survey of more than 300 global business leaders revealed a serious gap in employee loyalty, with results indicating that only 54 percent felt their organization was worthy of their loyalty. Similarly, according to Gallup reports, if your team members are happy with the work environment you’ve created, they show levels of customer loyalty 56 percent higher than others; rates of productivity at 50 percent higher; 50 percent higher rates of retention and 33 percent higher profitability rates.
3. Employees as Advocates: A Path to Improve Customer Retention
Customer loyalty expert Michael Lowenstein, Harris Interactive, discusses this principle in an article, quoting research from Northwestern University, Purdue and Kansas State University who have all noted a link between the way employees act and how well they serve as company advocates as a strong indicator of customer retention and higher sales. The institutions said the connection is even stronger than how satisfied the employees were with their employers. Demonstrating to employees how their actions impact your bottom line, and then rewarding them for positive engagement, can help improve you improve customer retention overall.
4. Improve Customer Retention by Consistently Keeping in Touch
Rhonda Abrams, USA TODAY business columnist and author recently wrote an article about losing a big customer to one critical factor: her organization failed to keep in touch with the client on a frequent basis. Avoid this, says Abrams, by writing out your top 10 customers and then setting up a solid plan for how you’ll reach those customers on a regular basis. Use enewsletters and emails to make sure your name remains highly visible to your existing customers and improve customer retention, says Abrams. Offering special discounts to new buyers? Don’t forget to do the same to your repeat customers, says the business advisor. Communication that is frequent and based upon listening, Abrams writes, is something many businesses neglect as things get busier – but it’s fundamental if you want to improve customer retention rates.
5. Focus on Loyalty-based Marketing to Improve Customer Retention
In a new report about loyalty-based marketing from Forrester blogs, Luca Paderni said that results of a study with 50 leaders in the marketing field showed that 40 percent felt their organization’s efforts to create brand loyalty weren’t reaching top performance.. Paderni says think of loyalty-based marketing as a total strategy, not just a pathway to improve customer retention numbers. Other findings from the report “A New Approach to Brand Loyalty” showed that not differentiating their products (cited by 91 percent of respondents) hampered their strategies to increase loyalty. Paderni recommends you can improve customer retention by knowing what creates a compelling sense of product value for your buyers at every phase along the buying cycle, and involving all your management and departments in focusing on customer loyalty.