Customer Retention: Definition and Strategy to Increase It
Businessmen are usually too focused on finding new consumers to increase their sales targets. In fact, increasing Customer Retention is no less important by finding new consumers. But, maintaining old customers to keep consuming and buying our products is not an easy matter. It takes various strategies to do so.
But now you don’t need to worry anymore, because on this occasion we will share the strategy in increasing the customer retention on you, complete with the definition of customer retention itself.
Definition of Customer Retention
Customer Retention is an effort to retain customers to get a good profit. So, how do the strategy? Let’s discuss from the fundamental thing.
In running a business strategy, there are two main ways to increase business profit. The first step is to add new customers or customer acquisition, and the second is trying to make your customers keep using your product continuously or customer retention.
In practice, actually selling products to old customers will be easier than the focus of finding new customers. Quoted from books titled Marketing Metrics, the tendency of the Exisiting Customer to be able to return to spend money on your product is 70%.
More than that, Customer Retention is even able to provide very large results for a business. Based on one study, the increase in the customer retention rate of 5% was able to increase profits of more than 5%.
On the other hand, if you are lowering or being budget efficiency, this customer retention strategy is the right step to do. Why? Because the costs that must be done to carry out customer retention activities are much cheaper than conducting customer acquisition. The fact shows that defering new customers it takes 5 times greater costs.
Therefore, if you can successfully apply customer retention well, then your profit margin will be much bigger.
Then, what are the Customer Retention strategies that can be done by your company?
Effective Strategy Running Customer Retention
You can do a variety of customer retention strategies to increase your profit margin well.
1. Invite your customers to create an account
Does the sales transaction available on your website can be done without creating an account? For certain types of business fields, this method is not wrong to do. But in fact, the customer account will make it easier for transactions.
For this reason, invite your customers to create a sales account on your website.
The goal is clear so that your customers can easily make repeated purchases or try other products. On the other hand, this will also make it easier for you to know what is needed by the customer in more detail based on the purchase history they do.
But, you need to know that this strategy is very dependent on what type of business you do.
In addition, try not to force customers to create an account at the beginning of the purchase transaction. This will reduce their interest in shopping. Therefore, you must understand your customers well.
One example is to let your customers complete the transaction process first. Next, try offering the account creation on your website, complete with the benefits they get if you create an account there.
2. Improve communication personally
As much as possible avoid using the word “customer” to greet your customers. Try to be able to mention the real name of your customers on every business you do. This condition will build your level of personality with customers.
If the number of your customers is considered quite a lot, then use the CRM (Customer Relationship Management) application to write customer information writers, and for use in every activity related to your customers.
Building communication in personally also means you can communicate according to what your customers are needed. You must pay attention to this condition from the purchase history, customer complaints, and other similar things.
A study has succeeded in proving that building personal communication with customers is able to increase your total income of 17%.
More than that, you will also be faster to return capital because 1 $ that you invest can generate profits of 20 $, based on the same research.
3. Have many product choices
If you can have and provide many types of products, it will certainly make it easier for customers to buy products according to their abilities and needs. For this reason, you must provide more products so that this retention strategy can run well.
Having many product choices will make it easier for customers to buy according to their needs and abilities. Therefore, one of the good retention strategies is providing many choices.
This strategy will be better if it is supported by a customer account because it can invite the old customers to return to buy your product.
4. Prepare onboarding programs
Onboarding is one of the efforts done to introduce your new customers regarding the products you are used. The onboarding role is very important in carrying out the Customer Retention strategy.
In a study, your customers are chammadinant to solve your product or service because of two conditions. First, they do not understand the function of the product. Second, they do not feel the benefits of your product.
If this can be done well, it will certainly be easier for you to offer products to various customers to increase the occurrence of sales.
5. Providing educational programs
Providing educational programs will provide a grudge about how to use products to customers, and at the same time help your customers to achieve the goals in buying products. In addition, customers will also know exactly about what they need to do to use your product and how to develop it.
6. Have good customer service
It is impossible for you to build a business without customer service. Besides being able to answer customer questions related to products or complaints, customer service is also an important key in increasing your business revenue.
Based on data taken from McKinsey, a positive experience with customer service can make 85% of customers buy back your product.
In addition, 72% of other customers will not reluctant in sharing positive experiences about customer service they have obtained. So, besides being able to build your closeness with customers, customer service will also open your chance to get new customers well through the recommendations of your customers.
So, how can a customer service be said to be good?
First, understand the problems of your customers properly. Give the best solution at the first time they contact you. Most likely, the results of his satisfaction will be very high. If you do the opposite, then certainly your customer satisfaction will drop to 45%.
Second, pay attention to your speed response to provide answers. 90% of customers want direct and fast answers from Customer Service. Therefore, there are currently many large companies that apply live chat features as a fast and easy communication channel.
7. Do up selling and cross selling
Up Selling is an activity offering products on a higher number, but is able to provide great benefits to customers. While Cross Selling is inviting customers to buy other products related to their initial products.
These two ways will make customers continue to use your product.
Selling and Cross Selling strategies must begin with understanding the needs of your customers. The aim is to provide great benefits for your customers.
Conclusion
In managing a good business it must be accompanied by a very appropriate strategy. One way is to use the Customer Retention strategy. Surely you don’t have to use all strategies above because each business has different customer needs. For this reason, choose a strategy that you think is most suitable for your customers.
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