How to Increase Customer Retention and Grow a Profitable Brand
If you own an established business and you are looking for strategies to help you grow a profitable brand, chances are, you are looking for external rather than internal solutions. External solutions could be acquiring new customers using paid ads, increasing your marketing efforts, serving new customer segments or even introducing new products’ lines.
These strategies may be great but how often do you look inwards to see how you can leverage the assets you already have? One asset that all established businesses have are their current customers. Customers make your business and if you can come up with strategies to help you increase the rate at which you retain your customers, you are on your way to raking in even more profits.
Why You Should Care About Customer Retention
Have you ever heard of the adage that says a bird in hand is worth two in the bush? This is so true because the bird you have in hand is more guaranteed than many other birds flying around in the bush. The same applies to customers and prospects. A customer in hand is worth more than two prospects in the marketplace. This fact is backed up by research. According to research done by Frederick Reichheld of Bain & Company, increasing customer retention rates by 5% increases profits by a whopping 25% to 95%![Need to get your business in front of an international audience? Learn how you can advertise with us HERE]
This is why you should care about customer retention. What other strategies can offer you such amazing results? Not much! That’s why you should do all you can to retain your customers. Besides helping you increase your profits by at least 25%, it is also cheaper to retain a customer than to acquire a new one.
Increasing Customer Retention
Each time people decide to buy from you, they do so because they trust you. That means trust is a very important factor in turning prospects into customers. Once customers are in, you must continue to do all you can to earn their trust and subsequent patronage. Without trust, or when there’s a reason for customers believe that you are untrustworthy, then the next thing you’ll notice is that your customer-retention rate is low.
How to Maintain Trust
To maintain the trust of your customers and increase your retention rates, you must be willing to do what’s necessary. What’s necessary, you may ask? Here are five (5) of them!
One of the ways you can maintain your customers’ trust is by being completely transparent about the services or goods you are providing. If there are extra fees to be paid other than what you advertised, let your customers know upfront. It is a bad business practice to advertise a price to your customers only for you to tell them about hidden fees at the end of the transaction.
This type of business practice might seem to work well temporarily but it will hurt you in the long run when customers start dumping your business for those of your competitors. Another example of how you can be transparent is sharing all the details of the product upfront. Do not share pictures that are completely different from what you intend to deliver to the customers. That’s not a good business practice and if you engage in such, you are telling customers that your brand cannot be trusted. Transparency is a key component of customer retention[Great Read: How to Reach Your Target Audience on a Shoestring Marketing Budget]
One thing that customers appreciate and are willing to reward businesses for is authenticity. How authentic are you? If you are truly authentic, it makes customers connect and stick with your brand. When you have lots of repeat customers, you have less stress, more profits and faster growth.
Innovation fuels excitement, builds trust and increases loyalty. If you want to earn the trust of your customers and retain them, you must commit to being innovative. Being innovative does not mean you go out of your way to please your customers. It simply means you are always looking for ways to serve them better using the resources available at your disposal. For example, you could be innovative in the quality and functionality of your products, the ease of use of your website, how you respond to customer inquiries, handle returns, etc.[Read: How to Write an Effective Ad Copy]
When you reward your customers often, they will come to trust you and will be willing to reward you with repeat business. Rewarding them with discounts, points and even surprise gifts all make a big difference in whether you are retaining them or losing them to your competitors.
When you care about your customer before, during and beyond the point of sale then you are building up the trust that the customer will have for your business. Once trust is established, it becomes a walk in the park to retain such customers. Okay, maybe it’s not that easy but the truth is, more people will stick with you if you show them you truly care about how they feel more than the money you are making from them.
Overall: To retain more customers, you must commit to doing all you can do consistently to retain customers. If you commit to it, your customers will reward you with loyalty, stick with your brand and help you grow a profitable brand.
Question: What are your strategies for customer retention? Share with us below.
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