A large majority of companies’ state that their number one priority is finding ways to increase revenue. In order to achieve this, they need to increase their sales. Most companies equate increased sales to increasing the number of consumers to their credit. In their desire to increase their client consumer base, companies tend to overlook the need to retain their existing customers and that can be done with digital engagement platforms. They forget that it is cheaper to retain their existing base of clients than work towards acquiring new ones.
The other fact that most companies overlook is that it is easier to sell products to an existing customer than to a new one. According to a report published by Marketing Metrics, the success rate of selling a product to a new customer ranges between 5 and 20%; whereas success in selling to an existing client stands between a whopping 60 to 70%. Given this, the easiest way to increase your revenue is by not losing your existing consumers.
Need for Customer Retention
Businesses on an average lose about 20% of their customers annually due to their failure to address and attend to customer relationships. The cost of this loss is huge, but very few businesses seem to understand the implications. Putting in place an effective customer retention strategy allows companies to identify and sell more to customers who have the highest likelihood of becoming long-term loyal customers.
Given below are five customer retention strategies that can have a massive impact on the bottom line of businesses:
1. The integrity of your products/services
Shortcuts often leave you short-changed and the first step to customer retention is your integrity. There should not be any inconsistencies between what you offer and what the customer receives. A customer invests in your products/services, might get inspired by a digital engagement platform based on your word with regards to the design, build, quality and serviceability. Any discrepancy between what was promised and what is delivered will result in a dissatisfied customer – and maybe a lost one.
2. Follow up a sale
One of the biggest mistakes made is to get complacent after the first purchase decision has been made by the customer. The other mistake is to not follow up with the customer but start chasing more business elsewhere. The first-sale is just the beginning and needs to be followed up with regular interaction to demonstrate that you care about his/her business. Reminding a customer that the purchase decision was a right one will help in referrals and repeat business. It makes poor business sense to use resources in generating new customers when your dormant customers may be more receptive to repeat business with you. A customer who knows your company and products is more likely to repeat business with you – with the least cost to the company.
3. Uncompromising customer service
Ensure that your customers are so well treated and happy that they tell others about their experience in dealing with you. Raise the bar of customer services to a higher than expected level with each customer. Providing immediate response, following up on any problems faced, on-time delivery, ensuring that you deliver what has been promised, and following up after-sales even if the customer does not call are some key features of excellent customer service that will earn you your customer’s loyalty.
4. Treat customer complaints as a gift
The majority of dissatisfied customers, in fact around 96%, just walk away without complaining. The problem is that while these customers may not tell you the reason for their dissatisfaction, they will certainly tell others. Companies need to put in place a system of unearthing complaints from dissatisfied customers. A customer who complains is offering you a gift by still interacting with you and thus providing you with the opportunity to convert their dissatisfaction to satisfaction. A successful resolution to their complaints will result in customer retention and greater loyalty to the brand/company.
5. Set up a good customer loyalty program through a digital engagement platform
According to Pareto’s principle – 80% of sales come from 20% of your customers. An increase of 5% in customer loyalty can lead to a 25 to 100% increase in profit per customer. A good customer loyalty program is an effective tool to help retain customers. However, the loyalty program should make the customer feel that he/she is getting something substantial in return. Loyalty programs that are sustained can increase the average customer spend by as much as 67%. Loyalty programs should not be a short-term strategy – the longer the customer enjoys the program, the higher are the chances of the customer remaining loyal to the brand or company.
The Bottom Line
Combined profit from repeat purchases via digital engagement platform by loyal customers will make a huge difference to your bottom line for years. NeuroTags offers the right expertise to customer retention through tailor-made customer retention strategies. Get in touch with the NeuroTags team to leverage the advantages of increased customer loyalty and sustained profits, today!