CUSTOMER RETENTION AND BUSINESSES
If you have a successful or growing business, you might have thought about expanding it. Every business expansion can be tied to its customers other than the finance and resource requirements. There are these moments in your business where you see your repeat customers coming to your salon or parlour every week and new customers coming every time.
But, what defines these moments? Who controls the customer flow in your business? What is the driving factor for repeat customers?
Before answering these questions, let me tell you that the profitability of any business starts with its already existing customers, which means that getting your clients to make a repeat purchase is essential. You can always get new customers, but bringing in new customers is more expensive than retaining old ones.
This ability of a business or a company to retain customers and get them to make repeat purchases is known as customer retention. This article provides you with a complete guide to customer retention with proven strategies for customer retention. And Online Scheduling Software is the best option to retaining old customers.
CONSIDER THESE BEFORE IMPLEMENTING YOUR CLIENT RETENTION STRATEGY.
Before diving right into customer retention strategies, you must consider a few metrics that help you pick the perfect customer retention strategy.
1.REPEAT CUSTOMER RATE: The repeat customer rate, also known as the repeat purchase rate, measures the percentage of customers willing to return to buy from your brand after making an initial purchase. Simply put, it involves the ratio of repeat customers and unique customers over a period of time.
Calculating repeat customer rate involves the division of repeat customers by the total number of unique customers in a given period of time. So it goes:
Repeat Customer Rate = No. of repeat customers
number of unique customers
With that being said, 20 to 40% is a good range of percentage to be in.
2. PURCHASE FREQUENCY: Another metric is the purchase frequency, which is used to find out the number of purchases made by customers. Measuring the number of times an average customer purchases from your brand is necessary to observe the rate of repeat customers and understand the rate of engagement with your brand.
3. AVERAGE ORDER VALUE [hereafter mentioned as AOV]: The third metric to consider before choosing a customer retention strategy is the AOV. This metric is used to measure the value generated by your clients. It helps you analyse your pricing strategy. AOV, simply put, means the value spent on your products or services by a customer on each purchase.
Average Order Value = Total number of purchases / No of unique customers
You must remember that the time frame for calculating these metrics must be the same. Now that you have an estimate of the above-mentioned metrics, calculate the customer value of your business or brand within the selected time frame.
Customer Value = Purchase Frequency ×Average Order Value
Customer Value allows you to evaluate client satisfaction and experience. It helps you reduce errors and increase efficiency. Now, frame a customer retention strategy on the basis of your customer value. Here are some strategies that help you retain your customers.
STRATEGIES FOR CUSTOMER RETENTION
- SURPRISE YOUR CUSTOMERS
Surprise your customers with compliment products, festive day coupons, and many more. Try providing personalised services, sending handwritten notes or offering freebies. Pay attention to their requirements and surprise them on their special days.
One such surprise strategy is used by Airtel by treating its customers with five data coupons on their birthdays.
This act of surprising your customer showcases your love for them.
- USE A FREQUENT COMMUNICATION CALENDAR
program and automate a sequence of letters describing events, offers, and thank you notes at different points in time, such as after services, before services, and during services. This is appreciated by your clients because they feel valued. These automated letters make them feel recognized and informed. This naturally draws them towards your brand again and again.
- IMPROVE YOUR CUSTOMER SUPPORT
Make your customer support extraordinary. Because, if they are satisfied, you will have an inflow of new clients from your existing ones through word of mouth. Dedicate your time and effort to your customers to achieve their satisfaction. Make sure that you don’t delay your responses and address all of their issues. An extraordinary customer support brings your fortunes in repeat clients, whereas poor customer support will push them towards your competitors.
- REACH YOUR CUSTOMER EXPECTATIONS
Reaching your customer’s expectations does not merely involve delivering an excellent product or service. It involves asking for their reviews of your products or services. Once you understand your customer feedback, your approach towards each customer becomes different and changes from one customer to another customer, meeting each of their expectations and building a never-ending chain of loyal customers.
- BUILD TRUST
Building trust with your clientele is yet another important strategy for customer retention. Trust begins with excellent customer service, transparency, effective communication, and, lastly, prioritising your customers. The level of your customer service creates an identity for your brand among your clientele. Be transparent about your products or services and communicate effectively. Respect your customers’ time and adapt to their schedules. This will build trust and your customers will prefer sticking around than choosing your competitors.
- PROMISE LESS AND DELIVER MORE
This is a success formula by Thomas J. Peters, who said that under promising and over delivering to your customers would make your services extraordinary. It acts as an extra mile that satisfies customers. This is a way of managing your clients’ expectations and, ultimately, satisfying them by delivering more than what you promised. Because of the over-delivering quality of your business, customers feel motivated to repurchase from you.
- CREATE A CUSTOMER LOYALTY PROGRAM
Now, this is a marketing approach through which you reward your customers who repurchase your products or services. Giving them incentives such as reward points, freebies or discounts for repurchasing; all of these encourage repeat business. These simple rewards encourage your clientele to repeat coming to you and this not only increases customer retention but is also profitable for your business.
- ENGAGE THROUGH EMAILS
Engage with your customers using email. This is another marketing strategy which is simplified through automation. According to a study, it has been proven that 72% of customers prefer emails to receive promotional messages. Sending them an email after receiving your service, such as “Thank you for choosing our services” or “What could be better next time?”, seeking their feedback, will display that your brand is approachable.
- STAND APART WITH YOUR SERVICES
The services you deliver define your brand. Delivery of services or products must be extraordinary. That makes your brand stand apart from your competitors. This creates your brand personality and clients prefer your brand over another because of the excellent services you offer.
- GIVE THEM DISCOUNT
Another customer retention strategy is the discount strategy. Offer your customers a considerable discount during special occasions or during festive days. Keeping in mind that people prefer a few services more during festive days and less during other days, finding your business season and offering discounts accordingly will draw in more customers.
- SEEK CUSTOMER FEEDBACK
This strategy of seeking customer feedback makes a lot of difference. Not many businesses consider customer feedback. As a result, they tend to lose their customers. Considering your customers’ feedback will allow you to adapt your business according to their requirements, and this, in turn, will make them feel important.
- GIVE IMPORTANCE TO CLIENT COMPLAINTS
This can break your business or bring fortunes when your approach is right. Complaints often turn up in business. It is common. But repetitive complaints harm your brand’s reputation. So, giving importance to client complaints and a soft response that you will take care of the issue would reduce the chances of your customers turning to your competitors.
Your existing customers are your treasure. You have already done the hard part of convincing them to choose your brand. Now comes the part of convincing them to repeat choosing your brand. Because they are aware of your brand, products or services. Focusing on retaining them by improving their experience every time they visit your store is a strong approach that profits your revenue and is more economical than bringing in new clients.
Choose the client retention strategy that fits your business and brings noticeable change over a period of time, and comment if you have used any of these below.