Often times, businesses place too much focus on acquiring new customers rather than nurturing and retaining the clients that they already have. With the ever-rising cost of customer acquisition, it’s extremely important to ensure the retention of existing clients.
A study by the U.S. Small Business Administration and the U.S. Chamber of Commerce found that acquiring new customers costs as much as five-to-seven times more than the cost of retaining existing clients. That number is steadily rising, so it should serve as a major incentive for businesses of any size to allocate more funding into various retention strategies.
Furthermore, the Harvard School of Business found that increasing customer retention rates by as little as 5% could increase profits from 25%-95%.
Why Do Customers Leave?
- 68% of customers leave a brand because they are unhappy with the service they receive.
- 14% of customers leave a brand because they are unhappy with the product they purchased.
- 9% of customers leave a brand to conduct business with a competitor.
As the listed statistics above show, customers are more likely to leave a brand not because of the specific product they purchased, but due to the level of customer service they receive from the brand.
Strategies For Increasing Customer Retention
Set Clear Expectations For Customers
One of the most important aspects to consider when working with a new client is the management of the customer’s expectations. It’s crucial to establish a clear vision of expectations for the customer as to what level of service they will receive.
Businesses need to focus on eliminating uncertainties as early as possible in the sales process as a way of ensuring a positive customer experience. Clients are much more likely to remember a negative experience than a good one. Essentially, your brand can provide a service to a client 100 times, however, if just one of those instances is negative, that’s likely the one the customer will share with his/her friends and family.
Build Trusts Through Relationships
It’s easy to know that people are more likely to conduct business with individuals that they trust, but it can be difficult to initially establish that trust. A study by the African Journal of Business Management showed that as trust between a customer and a brand increased, the commitment by the customer simultaneously grew stronger.
Businesses should research and look into prospective clients, in order to discover what values they share, as well as to understand the role your business plays in theirs.
It’s no longer enough to just provide a service anymore. Businesses must consistently and effectively differentiate themselves from various competitors in order to get their message across and retain customers.
Be An Expert In Your Industry
In order to build a positive relationship with existing clients, it’s important to put your knowledge of your niche industry on display. Serve as an advisor, offer advice. Deliver a courtesy call to inform them of changes to their service or update them on what is happening in your business.
Anticipate, Don’t Wait For Problems
All businesses need to maintain a proactive approach to customer service. Instead of sitting around and waiting for a problem to occur, eliminate the possibility of a problem before it happens. Routinely check in on clients to ensure that everything is running smoothly. Schedule a check up to see your client face-to-face.
Making your client aware that you care about them after a sale often has a significant impact in retention.
There are countless cost-efficient strategies to increase your customer retention rates. Your customers are the heartbeat of your business and it’s important to value them and treat them as such. Customer retention strategies don’t always have to include lavish gifts or meals; sometimes a phone call that shows them that you are genuinely concerned about their service can go farther than a monetary gift.
Queen City Media’s integrated marketing campaigns have been the foundation of several mutually beneficial business relationships. Contact us today to learn how your business can increase customer retention rates!