2020 has been rather rocky and, in this time, businesses are struggling to maintain continuity. Since it has become increasingly difficult to actively hunt for new sales leads, customer retention has gained prominence.
Customer retention refers to the ability of any organisation to continually bring in business from current clients over a long period of time. In simple words, it means keeping a customer coming back to your organisation. High customer retention rates indicate more customer satisfaction and, typically, better service.
In this article, we’ll discuss things you should do and avoid to ensure a high rate of customer retention. But first, we must talk about the importance of the same:
Why is increasing customer retention vital to a business’ growth?
- Customer retention is an indication of their satisfaction and, in turn, their loyalty to your organisation.
- Retaining customers is lighter on your pockets than chasing new leads.
- Better customer service leads to a higher chance of referrals and word-of-mouth marketing.
- Customer retention can also help build a buyer persona and determine a strong target audience.
- Satisfied consumers are likely to invest in your products multiple times, driving up your repeated sales.
- The return on investment is higher when you retain customers instead of spending time and effort acquiring new ones.
Customer retention plays a direct role in the profit-making capabilities of an organisation. A study by Frederick Reichheld of Bain & Company has revealed that a mere 5% increase in customer retention can enhance a company’s profits by 25% or more.
What to do to boost CX (Customer experience)?
Customer satisfaction is undoubtedly imperative for a business’ steady growth and expansion. So, what can you do, as a company, to ensure your consumers receive the best treatment?
Initiate a customer loyalty program
Customer loyalty, as discussed earlier, is an undeniable factor in increasing sales. Customer loyalty programs—offers, subscriptions, discounts, scratch cards—let consumers avail various cost-cutting offers in exchange for repeated sales.
For example, an ice cream store might hand out cards that you punch in on every purchase. After five purchases, you may receive a free ice cream. These tactics incentivise your consumers to purchase the company’s products. It improves CX while boosting sales—a win-win situation!
Send out customised product recommendations
Customers enjoy seeing a company invest in their interests. It builds a bond beyond transactions. Using personalised product recommendations and offers, allow your company to present options your consumer might love.
Customers are likely to add something to their shopping list if they see it as a quick add-on option. Additionally, you could also send a personal note with a product. Such notes are very well-received by consumers and enhance CX with your business. Personalised services will remind a consumer that they are not just a number to you and will boost loyalty.
Invest in AI and cloud telephony
Good CX is all about providing convenience. Nobody wants to go through several steps for simple tasks. Ease the mode of conversation by introducing artificial intelligence and cloud telephony to your customer service.
Using a popular cloud telephony solution, IVR (Interactive voice response), you can employ numeric input to route a caller to an agent who can solve their query at the first point of contact. This will not only quicken the pace of problem-solving and reduce the steps required to communicate with your organisation, but will also enhance customer satisfaction.
On the other hand, AI can be used for multiple tasks. Firstly, AI-integrated chatbots on online platforms can be used to solve queries without the need for an active agent. Self-service is widely preferred by consumers as it saves them time and effort. AI can also be used to identify buying patterns and studying customer behaviour. You can use this information to constantly refine your products and services.
Notify progressions through emails
Constant communication is the key to maintaining a bond with consumers. After a purchase has been made, do not abandon your client. Instead, you could send follow-up emails and later give them information on the delivery progression. By doing so, your customer is introduced to the transparency of your organisation. Progress emails assure customers that their needs are constantly being taken care of.
Additionally, consider adding notifications to your customer service. You can introduce products that are similar to the ones they have purchased earlier. Keep them interested while encouraging a new sale.
Actively react to feedback
It is certainly important to lend an ear to your clients’ requests. Feedback and surveys help you unravel consumer needs. However, nobody enjoys yelling at a wall. Customers can get frustrated if your company only listens to their complaints without any follow-up action.
When a consumer gives you feedback, register it and take active steps to make changes. Don’t forget to document the action for the benefit of the caller. Knowing that their complaints are being taken seriously will increase customer satisfaction.
Recommended Read: Ways to Deliver Excellent Customer Service
What could hamper your customer retention?
To take active steps towards enhancing CX is undeniably vital, however, certain mistakes might be inversely hampering the process. These simple errors can lead to customer dissatisfaction instead.
Increased call wait times
Long wait times were once a corporate stereotype. The absence of modern technology required several agents to be present for a response. However, this also meant longer wait times for those whose problems could have been solved without human intervention.
Cloud technology has revolutionised CX. Using IVR, you can direct calls and avoid bouncing a caller from one agent to another. Furthermore, IVR provides options that can allow the agent to understand the nature of the caller’s concerns before the conversation even begins. These insights come in handy while managing heavier call flows with varying customer queries.
Artificial intelligence allows you to present self-service options that let the caller seek answers through machine learning. Since a human is not present at all, it saves time for both parties involved. Additionally, AI also records the details of individual inputs, diminishing the need to continually provide details to different agents and platforms.
Complicated options for communication
As mentioned earlier, CX is all about convenience. The smoother the process, the better. So when consumers are given too many options on call, they tend to get annoyed. It’s a common mistake made in customer service. Reading out long lists on call can increase the timestamps, while also confusing the customer.
The protocols of customer service in your organisation can have just as great of an impact as human interaction itself. Ensure that your menus are crisp and concise. It saves time and effort, enhancing the customer experience.
Inconsistency in the customer experience
Inconsistency spells distrust. If a customer cannot trust you to provide a certain quality of service every single time, they will deviate to your competitors who probably can. Inconsistency in CX is one of the biggest mistakes you can make in customer service. If your products or services are not at par with your previous sales, consumers will assume that your company is a wild card and not to be wasted time on.
No matter what the circumstances, maintain a consistent repertoire with your consumers. If certain situations might cause inconvenience to your customers, inform them of the same. Customer satisfaction relies on transparency.
Constantly badgering consumers
Yes, it is imperative to follow up with consumers to detail their experience and get feedback. However, there is a limitation. If a company constantly badgers a people for feedback or updates, they are likely to lose customers. You must understand that their privacy must be respected. When an organisation crosses the line from caring to aggravating, consumers will not wish to associate themselves with the brand.
Let’s face it: Nobody wishes to be bombarded with emails, calls, and notifications when they are trying to take some time off or are busy with work. Not only can it limit your consumers’ interests and affect customer satisfaction but also leave a sour opinion of your brand. They might also communicate the same to their connections, ruining your public image.
Customer satisfaction is the core of consumer retention. And the latter is an important aspect of increasing profits. Hence, it is critical to improve CX and encourage brand loyalty. There are certainly several tips to follow and mistakes to be avoided. Following the aforementioned tips, you can work on your customer satisfaction and retain consumers. The market has been volatile in 2020 and this is the right time to convert your consumers into patrons who can support and drive your business through the rocky future.