As a business owner with passionate ambitions, it’s wise to attach a welcoming atmosphere to your brand. Long-term relationships with existing customers are essential for earning repeat business throughout the year. These ongoing interactions are part of customer retention, the ability to keep customers hungry for more.
Some new customer introductions are destined to become one-and-done encounters, but if the products and services you provide can lead to additional business, you need to leverage a good customer retention strategy. Making efforts to captivate existing customers can lead to significant wins well into the future.
For one thing, many sources claim that it costs at least 5x more to attract new customers than hang onto existing customers. Not only do repeat sales lead to more reliable revenue, but fans of your brand help strengthen its recognition with new audiences. Word of mouth is potent marketing, especially when it comes from individuals within someone’s circle of trust.
Invesp uncovered that 90% of people are more likely to make a purchase from a brand recommended by a friend. Plus, developing ongoing relationships with customers provides far more opportunities to gather feedback. This all adds up to a multitude of reasons to latch onto the customer retention programs that keep your business durable.
How Do You Measure Customer Retention?
If you’re wondering where you stand with repeat business, it’s a good time to evaluate your customer retention rate (CRR). Your CRR increases anytime a previous customer purchases another product or service from your company.
To make this calculation, you’ll need some customer data during a specific time frame. Take the number of customers at the end of the chosen time period and subtract the number of new customers acquired within the same time period. Divide the result by the number of customers at the beginning of that time period. Finally, multiply by 100 to get your percentage.
Results are rarely static and can change when applying different time frames to the equation. For the most accurate data, calculate your CRR regularly and analyze it throughout the year. Do different seasons have a significant impact? Are new or adjusted marketing efforts influencing your numbers?
Other ways to determine whether your customers are sticking around include evaluating your churn rates, time between purchases, how often items are returned or exchanged, and how often the same customers make additional purchases. Tracking this is a lot easier when your customers share purchasing habits via membership accounts and other digital footprints.
You can also gain valuable information by surveying your customers about the transactions they’ve made with your company and the likelihood that they’ll return soon. While the numbers volunteered through questionnaires may lead to estimates rather than precise input, the data gained can still tell you a great deal about customer satisfaction.
5 Customer Retention Tips for Small Businesses
Now that you know why keeping customers in your corner is so valuable, let’s take a closer look at some of the best customer retention strategies to encourage repeat interactions.
1. Prioritize Communication and Convenience
When it comes to positive customer interactions that retain customers, we’ll always top the list with exceptional communication and convenience.
Adopt every communication channel your customers crave, including phone, text, webchat, and email. Be sure to reach out to your customers with regular interactions that keep your business on their radar and invite them to stop by your website or physical storefront. But don’t drop the ball along the way with communication options that lead nowhere. Consistent and timely responses show your commitment to quality care.
You’ll also score big by implementing convenience throughout the customer journey. Each task along the way should be simple to complete with zero resistance. You don’t want potential customers walking away unless there’s a genuine mismatch between your offerings and their goals. Prioritizing a smooth user experience on your website, including straightforward navigation and breezy checkout processes, will help keep customers on the page.
2. Leverage Unique Personalization
If you’ve ever been a regular at a favorite takeout spot, you know that ongoing customer interactions develop relationships between businesses and individuals. As you become acquainted, the entire experience starts feeling more personal and you may even enjoy those brief exchanges.
This is the comfort level you should strive for with your own customers. Keep your communications light and friendly, making every customer feel special. Try customizing your messaging and sending birthday texts if your customers have opted into that kind of communication. The goal is to feel more human and relatable, a genuine helping hand when customers face challenges.
Many consumers also appreciate personalized recommendations based on previous purchases. According to data from Google and Greenberg, 61% of consumers actually expect brands to use their preferences to customize their experience. Personalization can lead to the right recommendations that benefit each user while improving your sales.
