6 Powerful Customer Retention Strategies That All Teams Should Use
There are two major schools of thought when it comes to customer acquisition. One group says that getting new customers is more important. The other group says customer retention is essential.
In reality, they’re equally important. Think of it like this. If you have a great customer acquisition strategy but poor retention then you’re filling a bucket that’s full of holes. If you have a great customer retention but poor acquisition, you have a sound bucket but nothing to fill it with.
The disciplines feed off of one another, but in this guide, you’ll learn multiple customer retention strategies. They’ll improve your customer lifetime value, encourage word of mouth, and create a better experience for everyone involved.
Be proactive with outreach (customer success)
One of the most common reasons people stop buying from a business is because they’re unable to accomplish what they set out to do. It could be because it’s too challenging to use the tool, they’re confronted with a difficult checkout process, or any number of factors.
If you sell your product and hope for the best, disgruntled customers with problems that are easily fixed can turn into a major source of lost revenue. You’d have no way of knowing who was dissatisfied and where they’re having issues.
Instead of waiting for people to come to you with problems, reach out to them first. Ask them how they’re enjoying the product/service, figure out if they’ve been able to use it properly, learn what their goals are, and help them through any challenges they’re experiencing.
It’s important to be systematic with this or you may over communicate with some people and ignore others. A CRM like Pipedrive will allow you to create a process and track your outreach efforts over time. You can even quantify how this customer retention strategy is impacting revenue.
Give different customer groups special offers
Whether you’re tracking them or not, you have multiple customer segments. This could be based on the subscription plan they’re on, the amount of money they’ve spent with your organization, or even their location. If you haven’t identified the important segments in your business then you should do that first before continuing.
After you know who your customer segments are and what they want, you can share unique offers with them. For example, if you have customers for an eCommerce store that spend over $200 every purchase and under $200 per purchase, you may want to offer them different things.
For the people who spend less than $200, you may offer a discount so they’ll be encouraged to buy more. For those who spend over $200, you may give them exclusive access to new product lines before everyone else or some other kind of loyalty bonus.
If you’re just starting out with different customer segments, don’t use more than four or it may become too complex. The segmentation criteria you use should be applicable to all (or most) of your customers. Things like average order value, age group, income, etc. could be useful factors to consider. Of course, it depends on your business and products but try out multiple segmentation criteria until you find the ones that work best for you.
Constantly collect customer feedback
Customer feedback isn’t optional – it’s essential. It becomes even more important when you have a business that exists primarily online. There are few, if any, opportunities to have candid conversations with your customers by chance. These conversations are important because they give you insights no amount of analytics data can and mold your customer retention strategies over time.
This can be a major blind spot if you’re not proactive about gathering feedback in other ways. With a constant flow of feedback, you’ll understand where your business is lacking, where you’re excelling, and what to prioritize going forward.
The good news is that there are many ways to go about getting opinions from your customers. A few of them are listed below but if you see a different method that also works for you, explore it:
- Video/phone interviews
- Prominent contact forms at key places
- Social media polls
- Usability testing
Video and phone interviews will give you the most insights but they’re expensive and time consuming. Do them once or twice a year. In the intervening periods, send out regular surveys that gauge different things like NPS surveys, customer effort score surveys, post-transaction surveys, etc.
Depending on the nature of the survey and what you’re asking, you can map the answers to specific customers within a CRM such as Monday. Once you’ve resolved the issue or built the feature/product the person wants, reach out and let them know. This shows that you’re listening to their feedback and it matters to your organization.
Become a mission driven company
Organizations that have a clear mission and fight for that mission publicly and behind closed doors accrue many benefits. One clear benefit is that it’s easier to make decisions. If it’s in line with your mission then it stays, if it’s not in line with your mission, it goes. This is a boon for any organization trying to navigate the murky waters of modern business.
Beyond easier decision making, mission-driven companies attract employees who are in line with that mission. Those employees are 54% more likely to stay for five years and 1/3 more likely to become high performers.
A mission driven company also attracts customers who believe in the mission. Brands like Patagonia are living proof of the effect your mission can have on your bottom line. It’s been shown that consumers will spend more with brands who stand for a cause that they identify with and even pay a premium for its products.
Don’t think you have to choose a mission that’s mainstream like climate change or gender equality. If that’s what you want, fine. It’s not a prerequisite. All you need to do is choose a mission that resonates with your company, customers, and employees – then stick with it over the long haul.
Reduce friction as much as possible
One of the largest contributors to customer retention and long term loyalty is how easy it is to do business with you. Other factors like quality of the products, customer service, etc. play a role. But when customers have to choose between to similar companies, they’ll choose the one that’s easier to do business with almost every time.
In any interaction, there are multiple steps or touchpoints a potential customer has to get through to buy from you. Often, they have to perform even more steps after they’ve purchased – like with software.
What steps can you take to ensure it’s easy for them in regards your business?
- One page checkout
- Tutorial videos while navigating your software
- Tool tips for potentially confusing pages
- Updating forms or information for customers
- Migrating them to new versions on their behalf
There are many places where you can reduce friction. It’s up to you to identify them so they only need to do the bare minimum to get the results they’re looking for.
Personalized appreciation gestures
The last customer retention strategy used to be more common, but is being lost in our digital world. That makes it even more effective. The people who keep you in business should be appreciated occasionally. Instead of just sending an email that thanks them, go a step further.
This could be something simple such as a hand-written thank you note. It could also be more involved like a gift for their family. The route you choose doesn’t matter as much as the personal touch you include. It’s rare for someone to use snail mail these days so it’ll be remembered more than any email or tweet.
Not only do you create goodwill for your brand, you also create the opportunity for customers to share their experiences with you on social media. A recommendation from a friend or stranger is given more weight than what a brand says about itself.
This article has only touched the tip of the iceberg when it comes to effective customer retention strategies. Think of it as a starting point with ideas that you can tweak to your unique situation. Begin with one or two of them, measure the impact over time, then add or subtract as needed. If you’re looking for a CRM to manage all of these initiatives then be sure to check out the helpful reviews on our website.