How Customer Retention Stems From Great Loyalty Programs
Your startup company has got to find a way to grow from the beginning. You are constantly looking for ways to add new customers to your business, and you may often forget to focus on the most important part of your business – retaining your current clients. This can be counterproductive for your business. Studies have shown that it is fifty percent easier to sell to an existing customer than it is to a new customer. Although it may be more exciting to focus your efforts on gaining new clients and customers, you will have more success by focusing your rewards efforts on the customers you currently have. The following tips will help you to set up solid loyalty management to ensure that your current customers feel the value in staying with your company.
Understand The Importance Of Retention
According to a study done by Bain & Co., a five percent increase in your customer retention rate can increase a company’s profitability by almost seventy-five percent. That’s a large increase from retaining a small percentage of customers. Other statistics from Gartner Group suggest that eighty percent of the future revenue of your company will come from just twenty percent of your current customers. The first step to setting up a program that allows you to retain customers is to understand just how valuable keeping your current customers around is.
Set Up A Customer Retention Program Within Your Company
Customer retention doesn’t come naturally from a great product and great customer service. This philosophy may work for a while, but you will eventually start to see your numbers lag. Your customers don’t actually owe you a thing, and they may move on as soon as something bigger and better comes along. When you implement a customer retention program, you are able to identify, track and promote to the customers you feel are most likely to become long-term, loyal customers.
Listen To What Your Customers Are Saying
Make sure what you are offering agrees with what your customers are saying. There is often a disconnect between the level of customer service a company feels they are offering, and what their customers feel they are getting. Don’t misread the cues your customers are sending you. Make sure you are offering the things that matter to them, and addressing concerns quickly. If your customers value discounts on purchases the least, then don’t offer those things as rewards. Keep track of your customer’s opinions to know exactly what to offer them to keep them around.
Utilize Social Media
If social media is used correctly, it can help your retention rates soar. Customers don’t want to socialize with a corporation online; they want to feel as if they are being engaged with an individual who values their input. Send personalized thank you emails to the followers who are the most loyal, and make them feel appreciated and important. Keep the corporate influence minimal to give the appearance that you are truly a friend of your customer.
High customer retention will translate into success for your company. In order to keep retention rates high, you must focus your efforts on customer loyalty and rewards programs.