Customer retention is one of the most effective ways for your business to flourish. There are several companies that focus on attracting new customers. Certainly acquiring new customers is vital for business, but building long-lasting relationships with customers drives more ROI and CLV (Customer Lifetime Value). In this blog we will see about customer retention problem. 

This article covers how to solve the customer retention problem and methods to increase retention rates and revenue growth. 

Without addressing the customer retention problem, brands should incur expensive customer acquisition campaigns that do not yield good results. This is because businesses tend to lose a major part of their customers in a short span.

Customers are less tolerant towards bad experiences. Here is a brief statistics on customer behavior. 

1. Only 3% of consumers are associated with their favorite brands

2. Over 32% of the customers stop doing business with their favorite brands after one bad experience and 42% of customers stop after two bad experiences. 

To frame an efficient strategy to solve customer retention problems, you should first determine why they leave.

Let’s have a deeper look at the reasons:

1. Bad Customer service: over 82% of customers had stopped doing business with a brand for their poor customer service

2. Customer Value: A report says that over 53% of users have changed their brands because their value is never appreciated or valued

3. Customer needs are not fulfilled: When companies fail to fulfill their consumers’ feedback or their complaints on time, they tend to stop doing business with the company 

By giving more focus on customer retention, companies can witness a remarkable boost in revenue. 

Even minor changes can yield huge profits. Here are some of the statistics that prove the truth behind the above statement: 

1. Just a 5 % increase in customer retention can yield a 25% increase in revenue 

2. 7% increase in the retention can increase CLTV up to 85%

3. Local customers spend 60% more per transaction 

So now how do you build a strong relationship with customers? Here are some proven ways to solve customer retention problems.

Implement Customer Feedback

Try various mediums to collect feedback from customers and try to improve or implement the possible feedbacks, this will also help in improving the quality of the service/products. By further analyzing the customer feedback, you can figure out the customer trends and what they actually want the most. 

Here are some effective methods to collect feedback:

1. Send a survey to your consumer email list consisting of few simple questions related to your brand

2. Keep an eye on your social media portals, and address the common issues that your customers are facing 

3. Collect feedback: Add a simple feature in your app or website for customers to share their feedback 

4. Consistently monitor on-site activity: Consistent monitoring will help you in understanding how your users interact with your app or its features like the FAQ. For instance, if the FAQ section on your site have a higher bounce rate, then it means you should communicate things more clearly. 

Deliver an Omni Channel Presence

Omni channel marketing helps you in delivering the appropriate information to your customers in a right time and right place. Omnichannel marketing is crucial for seamless customer experience because the same communication tone and experience on all your platforms will enhance the brand familiarity and boost your relationship. 

Over 91% of customers like omnichannel experiences and prefer to communicate with the brand through any platform and at any moment. 

Can’t you still believe it?

31% of customers rated in a survey that Omnichannel experience gives them an emotional connect with the brand

Brands that implement Omnichannel Marketing see 66% retention rates which are 90% higher than marketers using a single channel. 

Personalized Customer Experience

Offer personalized experience for your customers, whether it is a new feature in the app, price drop notification, or special discount announcement. Delivering personalized content will enhance your brand image. 

However, creating a personalized message can be achieved by understanding customer needs and challenges. It means a business should go beyond the basic demographics to advanced psychographics, techno graphics, and user intent. This will help in understanding the customer based on their gender, age, interest, and location. 

Express Gratitude

Expressing gratitude yields good results. Over 77% of customers like when the brands express gratitude and they show deeper engagement with their favorite brands. A report states that over 42% of people open thank you emails which also shows over 18.27% click rates and 10% conversion rate. 

Offer special events, rewards like birthdays, and anniversaries for loyal customers. Starbucks offers special rewards for customers with memberships on their birthdays. Customers can enjoy a large beverage of their choice for free on their birthday month. 

Here’s where to start:

– Introduce loyalty programs to show Customer Appreciation 

– Make proactive customer service 

– Provide a token of appreciation or give exclusive access for premium features for a period

– Even simple thank you message can make wonders

Takeaway

The key to a successful business is customer retention. The efforts and measures taken by the businesses to build long-term relationships with their customers will eventually yield great results in terms of ROI and CLV.