In this age, customer retention should be at the heart of your online marketing strategy. Also, retention is vital to the maintenance and building of communication with your existing customer base. Customer retention is sometimes overlooked in favor of acquisition, and while the latter should never be ignored, it is pertinent that you find a balance between the two. Yes, it is correct to concentrate on acquiring new customers, but you must not forget that the real value is in keeping them with you for a longer time.
Common customer retention issues and statistics to know
There is an abundance of customer retention statistics and issues out there, but for starters, we have gathered a handful to get you better acquainted to the topic:
• The White House Office of Consumer Affairs shares that loyal clients are usually worth up to ten times as much as their initial (first) purchase
• When your employees are highly engaged in your company’s retention initiatives, customer retention rates can increase by 18% on average
• Oftentimes, the probability of selling to a fresh prospect is 5% to 20%, while the probability of selling to an existing client is between 60% and 70%
• More than 70% of clients end their relationships with a company because of poor customer service
• Making too many mistakes, served by rude staff and cheaper pricing are the top three reasons why consumer switch brands
• Research shows that more than 60% of consumers agree that service, product quality, design and features are the leading factors that help determine brand loyalty
The advantages of customer retention
When you tweak your online marketing strategies and make customer retention a top priority, here are some of the benefits you will stand to gain:
• Your company will become reputable for the great services that it provides
• Happy and satisfied customers will recommend you to their family, friends, colleagues, etc.
• Loyal clients tend to leave positive reviews and higher ratings for your services and products
• More “retained” customers mean more data of customers’ behavior and buying history that can be used to improve your sales strategy and more
• Customers who stay with your company longer or spend more help improve CLV
What is CLV?
CLV stands for Customer Lifetime Value. It is an important metric that all companies should pay attention to. Basically, CLV is the total worth of a customer to your company over the course – over the course of their relationship. CLV is not always easy to measure as consumers tend to move between channels.
For example, they login under a different username or email address, and so on. Once you successfully obtain a clearer view of your company’s CLV, you can improve your business strategy as well as finding the right balance between customer retention and acquisition. Also, by focusing on customer retention, you can increase customer lifetime value as well. As the saying goes, a happy customer will more likely become a loyal customer.
How you can improve your customer retention rates
For starters, you must have the basics in place such as making a service or product available to people who want it, and at the right pricing, etc. Also, you must increase and improve your online marketing effort, and leverage on automated marketing tools to bring more customers back to your site to continuing purchasing.