Nowadays, the online market is highly competitive and saturated with various businesses. That means that consumers these days have numerous options made available to them. In order to pick a brand to do business with, consumers are not just looking for an exceptional product or service quality. They’re looking for brands that can provide seamless customer service and support, as well as provide an excellent overall customer experience.
On the other hand, businesses are not just about attracting new customers. In addition, they’re focused on retaining customers and ensuring their loyalty so that they can profit from long-term commitment and relationships with consumers. However, actually retaining customers and ensuring their loyalty is more difficult than it sounds. Aside from providing customers with what they need, businesses must also meet customer expectations and demands. That being said, here are a few ways to improve customer retention and loyalty.
Why is customer retention so important?
The main reason customer retention is crucial for the success of your business is that it’s 6 to 7 times cheaper to retain a customer than it is to acquire a new one. Aside from lower acquisition costs, you get to save money on marketing while you get to maximize profits.
As a matter of fact, improving your retention rate by just 5% can improve your profits by 75% to 95%. Not only that but existing customers oftentimes have a tendency to spend up to 67% more than new customers. When placed in perspective, customer retention is essential for your company’s profitability. Furthermore, about 80% of your company’s revenue comes from just 20% of your retained customers.
Meet customer expectations
Consumers these days browse a lot of websites in search for the best offers. In most cases, website performance can determine whether a consumer will remain on your website or leave for good. Before you start implementing customer retention strategies, make sure your website won’t drive them away in the first place. Every target audience has its own unique demands.
However, the most common factors that influence customer satisfaction on your website are speed, mobile-friendliness, navigation, security, user-friendliness and the quality of content you provide. Therefore, make sure your website’s performance is up to the task and that it can encourage visitors to remain on your pages, in order to improve their satisfaction. Consumers that are satisfied with how your website performs will most likely come back to either conduct more research or for repeat business.
Implement a loyalty program
Ensuring customer retention and loyalty comes down to giving them a good reason to come back in most cases. When your customers can see value in remaining your customers, they’re more likely to do so. One of the best ways to achieve that is to implement a well-designed loyalty program. A loyalty program rewards your customers for their purchases. With more purchases come better rewards and everyone likes to receive meaningful rewards.
For example, you can implement a co-branding prepaid card system that will reward customers with gift cards for their loyalty. In fact, 83% of consumers are more willing to return for repeat business if they’re part of a loyalty program. There are various types of loyalty programs you can implement. Just make sure you choose one that’s most appealing to your customers. For instance, many e-commerce businesses implement a point-based loyalty program where customers collect points from purchases that can later be exchanged for discounts or free products.
Provide a good service and support
Customer service and support are essential elements of customer retention. As mentioned before, the quality of products or services isn’t the only thing that matters to consumers nowadays. Customer service and support play a vital role in the customer experience. And if you think that doesn’t matter much, consider that 86% of consumers are willing to pay 25% more for better customer experience. Not only that but 60% of consumers will stop doing business with a company if they receive bad service.
Moreover, 46% of consumers would do business elsewhere if they receive inadequate customer support. Last but not least, one in three consumers will abandon their favourite brand due to a single bad experience. That being said, improving both customer service and support is of the utmost importance for ensuring customer retention and loyalty. Therefore, make sure you’re there when customers need you and that you provide them with the right information at all times.
Provide them with the convenience
Convenience is yet another important factor in customer retention. Customers prefer a seamless experience and they will pick a brand to do business with that can provide them with such. When offering convenience, consider implementing multiple payment options and accepting multiple currencies, especially if you operate internationally.
Also, set up an FAQ page or a knowledge base that will provide customers with detailed information about your policies, fees, pricing, delivery and other elements. In addition, provide customers with live chat options or 24/7 support service so that they can contact your staff if they need additional information. Furthermore, make your checkout process as seamless as possible. That includes removing a sign-up requirement on checkout, ensuring proper security measures are implemented and also ensuring there are no hidden fees consumers aren’t aware of.
Ensuring customer retention and loyalty isn’t as simple as it may sound. Consumers are generally savvy and they know what they want. If your business isn’t able to provide customers with what they need or want, they’re sure to abandon you and move on to the next competitor in line who can meet their needs.