The customer is the king!
It is the most important ingredient that makes any business a success or a failure. There are plenty of things that need to be right in order for your customers to stay with you. Your employees and you have to work round the clock to fulfill their expectations.
Many times, it becomes difficult to fulfill these expectations as they often keep on changing because of the market trends, behavioral pattern changes, and other external factors. In such chaos, it becomes difficult to retain customers, let alone get new ones.
And it’s becoming more difficult as the changes are more frequent as everyone is adapting to the new normal in the wake of this pandemic.
Hence, in the article, we are discussing what is customer retention, its importance during COVID, and how to go about it.
What is Customer Retention?
According to Wikipedia, “Customer retention refers to the ability of a company or product to retain its customers over a specified period. High customer retention rate means customers of the product or business tend to return to, continue to buy or in some other way not defect to another product or business, or to non-use entirely.”
Or in simple terms, it’s a way to keep your customers engaged with your organization, help them solve their problems, and try to fulfill their needs as and when they arise.
Why is Customer Retention Important?
Customer retention is one of the best ways to know the reliability of your company and its services. High retention rates show that you are doing good work for your customers and that they trust. It also shows that you prioritize your loyal customers and their requirements.
Talking about revenues, improving customer retention plays a vital role in consistent growth and financial planning. The more committed customers you have, the better the next financial year will be.
Well, acquiring a new customer is more expensive than retaining existing customers. Also, it is quite possible that new customers’ lifetime customer value can be lesser than your already existing customers which can decrease your profit margins drastically.
Moreover, there are only 5-10% chances of you succeeding in selling to a new customer in comparison to 60-70% chances in case of the existing ones. Because the customers who are already with you, know and trust your brand which reduces the number of efforts and resources you have to put in selling something to them.
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How to Calculate Customer Retention Rate?
Customer retention rate = ((CE-CN)/CS) * 100
- CE = Number of customers at the end of a particular period
- CN = Number of new customers acquired during that period
- CS = Number of customers at the start of that period
You can use this formula to calculate your customer retention rate either quarterly or annually, depending on your marketing campaigns or customer life cycle.
Having a clear idea of your customer retention rate (CRR) can help you plan better sales and marketing strategies.
Since we’ve got all the basics out of the way, let’s discuss some of the tips for customer retention during COVID-19.
Promote your brand’s initiative
People will buy things if they believe in them and are personally invested in it. Use this time to try to connect your customers with your company’s mission. Build brand loyalty by providing impeccable customer support. You can try to promote your company’s history, the commitment to your employees and clients, and any other charity work that you are doing. The customers of today want to know how active you are in your community and how you are contributing to make this world a better place.
Share your company’s values
It is important to share your company’s values with your existing customers. Along with some emails consisting of “we are in this together,” you can also provide them with valuable resources for free that they can use during these hard times. You can share resources like how to handle customers in COVID’19, ways to pivot a business during this pandemic, etc.
Create insightful content
There is already a lot of content available online today. Adding value to it is more important than just publishing. To do so, try and host webinars, podcasts, and online tutorials. Try to host online events or live video streams and connect with your customers or community; keep them engaged and share knowledge.
Increase your social media presence
Social media plays a vital part in keeping your customers engaged and even generating leads for some businesses. Explain to your employees the importance of social media presence and the ways they can get in touch with customers. Create valuable posts for them and communicate clearly with a message that you are there for them during these tough times.
Add a personal touch
Remember that the COVID crisis has personally affected your customers at almost every level. When you speak to your customers try to create personalized messages. Do not send bulk emails; they’ll know. You can send them customized emails, check-in with them through a call. This will add more personal touch to your communication and show your customers that you are there for them in this difficult time.
Customer loyalty program
You can run customer loyalty programs to provide incentives to your customers in terms of gift cards, free trial, or discounts. This will help you attract more customers and get more leads and retain existing customers as well.
Work on enhancing your customers’ experience
This is a perfect time to analyze the customers experiences you are providing to your customers and know different measures you can take to improve if it’s required. Try to personally engage with your customers and clients to see ways you can improve customer satisfaction and take it to the customer delight stage. Start by analyzing your website’s customer journey. Add surveys or polls on entry and exit points to engage as well as get feedback from your customers.
Pivot your products and services
To stand out, you must assess your business and uniquely pivot to address customers’ concerns or needs. Instead of selling a product or service that is not useful to customers, try to analyze what they want, where they are stuck, and then build something that helps them.
Focus on short term goals for now
Customers show little interest in making long-term commitments in this pandemic. Focus on short term actions, promotions, and offers. Here, try to think of short-term offers that you can offer to customers which meet your customers’ current needs.
Update your Website
In this pandemic, when your customers come on your website they will want to know about the necessary steps you are taking to overcome this crisis. They might have questions like, are you still open, how are you selling your products, is your business fully operational, what preventive steps are you taking, etc.
Provide them clear and concise, up-to-date information. Prepare FAQs to answer the questions people are searching for, and keep updating them.
Combination of Self-service and Live Support
Customer service is about impactful interactions between your customers and your support team. If they don’t get the helpful answers when they need it, then chances are they will go to your competitors. It is said that 88% of customers expect you to respond in 60 minutes whereas, 30% of them expect a response in 15 minutes or less.
Hence, it is best to provide customer service round the clock with the help of self-service portals, updated knowledge base, live support, etc. Provides an easy platform to ask questions, raise their concerns, and find solutions on their own and also keep an option for them to get in touch with you. Another major benefit of having a knowledge forum is that you don’t have to answer the same set of questions again which saves a lot of time.
Practice Active Listening
If your customers have a bad experience with your team, they are very likely to never come back. But, if they have even a single positive experience, they are likely to recommend you to others. Customers often appreciate it when a company calls them just to listen to their opinion about a brand. So, it is very important to listen to your customers in both cases. Make them feel valued. Active listening also helps to improve your products or services.
For active listening, check review sites like Yelp, G2Crowd, Google My Business, social media platforms like Twitter, Yahoo Local, etc. Another way is to send out surveys. Send emails or push notifications to invite them to give feedback or collaborate on your product with your team to make it better.
These are some of the great ways to listen to them. These small things will make your customers more loyal to your company.
In this pandemic, it is important to change your company’s customer retention strategies of approaching customers in terms of marketing and updating the product with the required features. When you provide value to your customers there are better chances of them getting you more business by spreading the word.
It is time for all businesses to be there for their customers!
Maulik Shah is the CEO of Biztech, an eCommerce web Development Company from India. Maulik likes to explore beyond his comfort zone. When it comes to writing for the blog, his contribution is priceless. No one else on the team can bring the deep industry knowledge to articles that he has.
However, his door is always open and he is generous with sharing that knowledge.