Customer Retention: 5 amazing hacks you need to know

July 14, 2021

Customer Retention brings loyalty, and loyal Customers make you a brand

Customer retention, brand loyalty, and repeat sales are all intertwined. Customer retention helps building brand loyalty and brand loyalty builds trust which ultimately leads to repeat sales.

Since large sums of money are required to acquire new buyers, customer retention becomes more important.

In this article, we are going to have a closer look at customer retention strategies, the importance of them & metrics we could use for better customer retention rates.

But first of all, you should know,

What is Customer Retention?

Customer retention is the ability of a business to engage its customers in availing their products and services repeatedly.

They use several strategies to reduce the number of customer defections and improve the user retention value.

Importance of Customer Retention

It improves the chances of better sales. A regular buyer is easier to nudge into some more purchases as compared to a new buyer. Also, stats suggest – getting a new buyer is 5-10 times costlier than a regular buyer.
Regular/repeat customers are way more profitable. In a study, it was found that a customer retention rate of just 5% can elevate your profits up to 95%. So kindly retain or suffer the pain.
Better marketing. A loyal customer would help you get more customers. His word-of-mouth recommendations would not only help you acquire more but would help you with easy retention too.

For different businesses, the retention strategies vary.

For example, someone who is selling high-value products will have a higher Customer Lifetime Value (CLV).

To make prudent customer retention strategies, one should refer to these 3 Customer retention Metrics.

Customer retention rate.
Frequency of purchase.
Gross Revenue Retention.

These metrics play a significant role in customer retention management.

Customer Retention rate

Logo retention or customer retention rate tells you how many customers were you able to retain in a given period.

Formula

CRR = no. of customers retained/ no. of unique customers.

Why is CRR important?

It gives you an idea of how well your retention strategy is working. It also helps you determine the product-market fit.

Frequency of Purchase

The frequency of purchase shows you how many times a buyer returns to buy from your store. To find out the frequency of purchase in a given period, divide the total no. of orders taken by the no. of unique buyers.

Importance of Frequency of Purchase

It is important because a notable amount of a store’s annual revenue comes from the customers who keep coming back. Also, knowing the frequency of purchase allows a seller to predict their monthly sales better.

Gross Revenue Retention

Gross revenue retention (GRR) gives a percentage of how much recurring revenue is retained by a company from its customer base.

Formula:

GRR = (Total MRR – Churned Revenue)/Total MRR

100% is the maximum achievable GRR.

Why GRR?

It helps you to assess how well is your customer value proposition doing. A high GRR score indicates prosperity in business and vice versa.

Let’s move on to our next segment;

Hacks to Retain your Customers

Now that you know how important it is to retain your customers, let’s have a look at some time-tested strategies to boost your Customer Retention.

Use Customer Account Pages
Setting up customer account pages helps both- the customers and the retailers.
It helps a business to have a better knowledge of their customers. . With the introduction of machine learning technology and highly efficient algorithms, a business can use the data to serve their customers better.
On the other hand, it will be easier for the customers to repurchase. They could use multiple options like creating a wishlist, adding the products to the cart, and many more, to make their shopping experience better.
Stay on their Radar
According to a study, about 97% of the people that interact with your brand or visit your website for the first time do not convert.
Most of the time, people are just researching, comparing, or price shopping. They end up taking no action which gets the sale or any positive outcome for the business.
In this case, they are not a bad or good customer, they are just in a different spot in the sale’s funnel.
If you follow up with them and stay on their radar, utilizing re-targeting ads or any of the myriad of marketing opportunities out there, you’ll be able to keep that top-of-mind awareness.
Use CRM to increase client retention rate. Send engaging emails to the customers, use SMS marketing, use Facebook to push ads., use web push notifications. Automate your marketing strategy to have an impactful yet cost-efficient reach.
Use Customer Loyalty Program
A loyalty program or retention program has proven to be an effective tactic for many businesses worldwide. It is based on the idea of rewarding your customers for continuing to shop from you.
It’s a win-win for both sides. The customers get an added value each time they buy.
As a reward for their current purchase, offer them some credits and discounts on their next purchase. It will motivate your customers to revisit your store, giving you the benefit from the repeat business.
The post-purchase experience should be great as well
The post-purchase experience plays a vital role in customer retention. You need to make sure your customer is satisfied.
Follow up, ask them for their feedback on the whole experience, ask for suggestions, and finally thank them for doing business with you.
Keep them Informed.
- Provide a detailed description of the product.
- Blogs might be a great help.
- Address the Frequently Asked Questions (FAQs)
- Keep a section of public feedbacks. It will help you to improve customer loyalty.
- Help them track their orders.
- Provide a detailed bill.
Implementing these strategies may look pretty exhaustive. People find it tough to operate complicated online tools. But nowadays, it’s becoming easier as technology is advancing. There are many tools available in the market to make it convenient for you to go online, implement these strategies, and operate smoothly.
Pro tip: – Use Instocx mobile app for the best results.
A customer base is an asset to your business. With well-planned retention strategies, you can improve order rate, hold existing customers for longer, and convert newly acquired customers to repeat customers.