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The key to your business's success is ensuring your customers return again and again.
The key to building a successful business is growing your customer base. It’s normal for some customers to stop buying from you. After all, people move, and their needs may change over time. But if you’re constantly losing customers, especially if they head to your competitors, there’s a problem you must address.
Poor customer retention keeps your business stagnant and costs you money. According to Invesp, it costs five times as much to gain a new customer as it does to keep a current one. Additionally, the probability of selling to existing customers is 60% to 70%, while the likelihood of selling to a new customer is only 5% to 20%.
Businesses must avoid getting complacent with current customers. We’ll explore seven retention strategies to help you better engage with customers and keep them happy, and share crucial customer retention mistakes to avoid.
Incorporate the following valuable strategies and tools into your sales process to help earn repeat business and support your customer retention goals.
The first step in boosting customer retention is knowing your churn rate – the rate at which customers leave your website and stop buying from you. Your churn rate can tell you what’s not working in your customer engagement strategies. Understanding this number can help you anticipate changes in your bottom line and make strategy adjustments to keep customers more engaged and happier.
The right customer relationship management (CRM) software supports and enables customer retention by helping you track customer behavior over time. It can tell you about customer purchase patterns and product usage, and alert you when they stop buying from your business. You can also track customer service interactions to understand their frustrations and issues.
These key customer behavior variables are warning signals that you might lose a customer, allowing you to intervene and potentially save the account. Once you have a clear idea of your customers’ behavior patterns, you can determine if you’re on the right track or if your customer experience strategies need an overhaul.
CRM supports customer retention by:
Once you have information that tells you when and why customers are leaving, you’re in a position to target them with emails. Email marketing is the most effective online strategy for successful lead conversions.
Integrate one of the best email marketing software solutions with your CRM to do the following:
Email marketing programs enable rapid responses and better communication. You can create templates with content to go out immediately when triggered.
CRM and email marketing services make it easier than ever to personalize your communications so customers feel prioritized and important. CRM systems store data about purchases, customer preferences and customer support history. You can leverage this data to launch email marketing campaigns with timely and personalized content for customers, including subject lines that address them by name. Customers are more likely to pay attention when they see a personal touch in marketing communications.
Personalizing your customer interactions creates an incentive for customers to stay with you. They see that you care, creating a closer relationship with your business. Personalization improves customer retention rates through improved customer experiences.
A customer loyalty program rewards customers who frequently buy from your business, giving them an incentive to continue shopping with you. It also shows them your business is paying attention. Some loyalty program tips include:
A customer loyalty program can motivate your customers to buy from your brand, keeping your customer retention rate high.
An online brand community brings businesses and customers closer together, creating various benefits, including the following:
Building an online community is a powerful way to engage your customers and improve customer retention.
Excellent customer support makes a difference to your business’s success. Your entire team must strive to delight the customer.
Consider adding additional support channels like the following:
Customer retention rates vary across industries, depending on the competitive environment and how easily customers can switch providers. You can calculate your customer retention rate with this formula:
Total number of customers at the end of the period minus new customers acquired during the period divided by number of customers at the start of the period
If your customer retention rate is lower than average for your industry, you may be committing one (or more) of the following mistakes.
Customer retention is about keeping your current customers happy. When done correctly, customers become unwilling to switch to another business. You can make it more convenient for them to stay with you than buy from a competitor. Successful businesses are the ones that recognize that customers form the backbone of their business. Support your customers with retention strategies, and they’ll support you.
Jared Atchison contributed to the reporting and writing in this article.