Increasing your customer retention rate has a direct correlation to ROI. But where to begin? Start by increasing customer engagement with these 4 steps.
Customer Retention Strategies
What’s the difference between companies that grow and those that don’t? The deal- breaker: customer retention.
You know that driving revenue is often a company’s key priority - and that means retaining new clients. It’s repeatedly said that keeping existing customers is 5x cheaper than acquiring new ones. This makes a sound customer retention strategy (through loyalty, valuable customer relationships, and increased user engagement) essential. More importantly, the success rate of selling to existing customers vs new customers is three times more likely!
OK, but where to begin?
Whether you’re a seasoned marketing director or customer experience novice, these customer retention strategies will launch you into strong customer relationships.
1. Determine Your Brand Promise
Successful brands are those which have invested time and effort into building a brand promise that ties directly to its customers, which in turn drives loyalty based on shared values. To identify your brand promise, and measure the health of your customer service satisfaction program, establish a few ideas clearly:
- what you make (SaaS, insurance, etc.)
- the product category (online focus group, health insurance, etc.)
- customer type (market researchers, families with children, etc.)
- market location (global, rural America, etc.)
- actionable motivation (in a quick-moving startup market, during hard times, etc.)
Understand the unique selling point that your brand repeatedly offers to customers, and use that to drive how you should position messaging. Your brand promise is the mission, vision, and core values of your business. And that’s definitely much more than a tagline!
Uniqlo is one example of a brand that has established a clear brand promise: to “inspire the world to dress casual.” By hosting its planning, design, manufacturing and distribution capabilities in-house, Uniqlo stays close to customer needs and ensures affordable prices. And, they always follow through.
With its clear brand promise, Uniqlo has boosted its customer retention rate and become a household name for clothing worldwide.
2. Customer Feedback Is Key
According to Inc., almost 90% percent of shoppers trust online reviews as much as friends. Customers connect deeply with online reviews, because it’s an accessible source of credible information that they can trust. This also applies to brick-and-mortar stores and service-oriented businesses.
Customer review strategies, as a result, have become a key priority.
After customers have gotten your product and gauged satisfaction, suggest that they write reviews! Their time is valuable, so make sure you’re giving them a reason to leave a review. Offer incentives to your customers, like a discount or coupon code, entrance into a contest or gift cards for online shopping.
G2 Crowd is a brand that understands the importance of reviews and takes action on it. If you write a review of a software that you use at work, you stand to win a $10 Starbucks gift card!
What gets measured, gets managed. Actively measure customer reviews to understand how they experience your product, and establish benchmarks of success for responding to their needs. For example:
- Use a Customer Satisfaction Score (CSAT) or Customer Effort Score (CES) as an alternative to Net Promoter Score (NPS) to understand whether customers would recommend your product to others
- Ask customers to rate their satisfaction regarding the way their request was supported
- Calculate your customer engagement rate by looking at the number of people who tag your brand or interact with you on social media.
This is valuable customer feedback in its most direct and raw form!
3. Guarantee Customer Service Satisfaction
Maintaining your customer retention rate is all about showing customers that you care. So, what’s the best way to do that?
We know that social media platforms have become core ways in which customers express their opinions and feelings towards brands. Show customers that you acknowledge and care about their experience by responding immediately. This is a simple way to provide great customer support.
For example, consider splitting your Twitter accounts into a “brand” account and a “customer service” account, like Nike.
Relationships between brands and consumers are solidified by rapid response times. Nike demonstrates endless patience with customers’ requests despite mass volume.
With a Twitter account dedicated solely to solving its customer’s problems, Nike provides support all days of the week and in multiple languages. And, the support language is branded, which means the brand experience carries over into customer feedback management.
Spotify is another example of a company that treats its customers right on social. In addition to a dedicated support account, Spotify gives specific instructions to customers looking for help. Take their tech queries advice for example: “‘For tech queries, let us know your device/operating system. For payment queries, drop us a DM!”
Laying out the key metrics for social media support can be especially useful for this. A few helpful metrics include:
- Response Rate: On platforms such as Facebook and Yelp, this is visible to customers and can determine their perception of your business and how likely they are to engage with you.
- Sentiment Analysis: Measure the number of positive, negative and neutral engagements you have.
- Popular Keywords: Monitor the top keywords and topics related to your search to better understand how people view your brand. This is a great way to establish benchmarks for user intent and audience interest.
Connecting on social is crucial. This not only develops relationship with happy customers, but identifies unhappy customers before they churn. With a touch of personality and personalization (take a leaf out of Netflix’s book!), you''l implement the brand promise and increase user engagement.
4. Measure Historical Customer Churn Signs
If your customers are engaged, they’ll stick around longer. If they aren’t engaged, it’s time to assess the problem. Figure out:
- Where you’re losing customers
If it’s unclear at which stage of the customer journey you’re losing and acquiring customers, it’s time to deconstruct your customer life cycle. If this method is new to your team, you'll likely find issues within the customer life cycle and a clear reason for customer churn.
You might notice, for example, that customers drop out during the on-boarding process because signing up takes too much time. Or that customers who complete a free trial without upgrading their subscription believe the product value is not clear. This makes customer acquisition extremely difficult.
- Why you’re losing customers
Unpacking your customer life cycle makes calculating customer churn rate easier, but it doesn’t establish why customers take certain actions. Give your customers an outlet for feedback and listen to their biggest complaints.
Try installing chatbots like Drift to automate common customer feedback issues, especially if your business falls under the eCommerce category. Or, install customer journey analytics platforms like Full Story, which visually tracks the way a customer navigates your website. If you know that customers begin on-boarding but never finish, you might discover that your sign up page is broken. That's an easy fix!
- If you’re targeting the right audience
Identifying the correct audience match is one of the most difficult challenges for marketing teams and executives alike. Although a common suggestion is to interact with other teams like sales and customer success - because they interact closely with customers - that tactic can be difficult if knowledge holders spend most of their time in meetings.
Alternatively, look to raw data (like the U.S. Census or Facebook’s Graph API) for unique customer insights. You can also look at broad demographic information from places like Google Analytics that might influence your customer personas in an unusual way.
Next Steps in Customer Retention
According to Salesforce, businesses should aim for at least 85% of customer retention rate for a business to remain scalable. This varies from business to business, which is why it is crucial to monitor your own customer retention and user engagement rate every month. This way, you can identify strategies that work best for your product and industry.
Ready to take customer feedback to the next level? Check out our full eBook: 4 Innovative Ways to Customer Feedback Challenges [With Examples]!