Retaining customers should be a top priority for all businesses. It's a little-known fact that it costs 5-8 times more to attract a new customer than to sell to an existing customer. So if you focus your efforts strictly on attracting new customers, you'll end up spending more money and generating fewer sales. Customer retention, however, can turn these numbers around by driving significant revenue growth for your business.
Of course, retaining customers isn't always an easy task. Perhaps the customer came to your business for a one-time purchase, or maybe he or she found a better deal elsewhere. Regardless, there are countless reasons why a customer may choose to do business with one of your competitors instead. So, what steps can you take to improve customer retention rates and prevent this from happening?
Create Personal Connections
Customers are more likely to stick with your business if they feel a personal connection to it and/or its sales reps. If you treat customers like they are friends, they'll probably continue doing business with you. But if you treat them like just another disposable customer, you'll struggle to retain them. This is why many seasoned salespersons go the extra mile by taking their customers out to dinner, sports games, and other events. Creating personal connections is key to achieving a high customer retention rate, regardless of the niche/industry in which your business operates.
Respond to Customers' Needs
When a customer reaches out to your business with a question or concern, make sure you respond in a timely manner. Customers want to know they can reach someone if they encounter a problem. If the business is non-responsive, it's doubtful the customer will stay with them.
Another tactic that's often used by businesses to improve customer retention rates is a loyalty rewards program. As the name suggests, this is a program that rewards customers for choosing your business. You can use a simple point-system program, for instance, where customers earn a point for every dollar they spend. Once they've collected enough points, they can redeem it for promotional discounts, free products, or other items.
Customer retention isn't a one-time act. It often requires nurturing throughout the customer's lifecycle. So, continue building personal connections and addressing your customers' needs. As long as you remain dedicated in your efforts, you'll notice a positive improvement in your business's customer retention rates.