7 strategies to improve customer retention
We often observe companies obsessed with acquiring new customers, often as part of an aggressive growth plan.
With such a plan and pressure from management and shareholders, it's natural that these numbers will influence the roadmap of their digital channels. However, companies should not neglect customer retention in favour of acquisition.
What is customer retention anyway? How many times have you seen a customer lifecycle diagram? As a reminder, this is what a typical customer lifecycle looks like:
It is essential to look at it as a perpetuating cycle of increasing customer advocacy through a series of touchpoints that aim to build, maintain and grow a base of loyal and advocate customers.
Building loyalty and advocacy starts with the first contact you have with a customer and continues throughout the entire lifetime of the relationship.
Each stage of the customer journey is a key touchpoint and opportunity to engage with the customer, add value, provide great experiences and increase retention.
To turn customers into advocates, you should focus on your customers' needs and aim to exceed their expectations.
“It’s about putting customer value rather than maximising profits at the centre of business strategy.”
Ok, but why is it so important?
In a nutshell, the retention cost is much lower than the acquisition cost. In addition, according to studies, increasing customer retention rates by 5% can increase profits anywhere from 25% to 95%. Now imagine if you lose a key customer? Achieving your targets could become even more challenging due to missed opportunities and increased acquisition costs.
Now we're talking, how do we do it? At Atlanttico, we believe the following 7 strategies to be fundamental.
Know your customer - Work closely with your customers to understand who they are and learn more about their needs, motivations and frustrations. Get them involved early in your product or service to validate market fit and desirability.
Build trust - There is no loyalty if your customers don't trust you.
Set customer expectations upfront - Surprises are not always welcome and can negatively affect their perception of your services.
Be proactive - Instead of waiting for problems to occur, a proactive company can eliminate problems before they happen.
Use automation as long as it's not detrimental to your relationship with your customers - Automation tools allow time-consuming tasks requiring manual intervention to be standardised into repeatable processes.
Measure customer satisfaction - Define KPIs around customer experience and conduct regular customer research. Keep iterating until you reach your goals.
Exceed expectations - But don't make your life easier by setting the bar low.
