Why is it important to retain your existing customers?
Customer Acquisition versus Customer Retention Strategies!
The ‘customer’ element is crucial to the continued success of every business. Much emphasis has been laid on mapping customer journeys (CJ), crafting worthy customer experiences (CX) and increasing customer lifetime value (CLV) owing to the recent digital boom. The key to the long-term dilemma between focusing on acquiring new customers and framing customer retention strategies requires a clear thinking and proper planning.
Customer experience is a catalyst for transformation. It directly impacts culture, strategy, structure and all parts of a business. – Christine Crandell
An increase of 5% in customer retention rate is supposed to increase the profit rates by 25% to 95%, depending upon the industry.
These numbers distinctly indicate the influence of customer retention strategies in a positive direction to sustain and expand the business. Still, many organisations incline to focus more on getting new customers rather than keeping the old ones. Ideally, holding on to the existing customers should also be considered as one of the tactical business outlines because of the following reasons-
1. Matters of Money
Customer acquisition expenses are one of the major costs in managing a business. As obvious, it is something unavoidable, but balancing it with customer retention benefits is a smarter way to accomplish commercial goals. Companies have to allocate a considerable amount of budget for customer acquisition. Comparatively, serving existing customers is much easier, simpler and cheaper in terms of time, efforts and money with robust digital solutions. Cloud-based software and self-service apps have shown the way to exceeding customer expectations.
2. Profits with a Personal Touch
No business would like to incur losses every now and then. The agenda of establishing and maintaining customer relationships is to gain more with optimal investment in service and support areas. Innovative customer experiences help to create a long-lasting bond with your patrons, making it easier to understand their needs, track the progress and be prepared on how to deal with their issues. Also, modern technologies make it easier to deliver personalised service captivatingly and be in their good books!
3. The Referral Rule
We all know the value of referrals. Everyone tends to believe and rely on the words and experiences shared by their peers or known associates when it comes to buying a particular product or service. It increases a level of trust and credibility about the product and the vendor when he is being referred by an existing user. Loyal customers become your brand evangelists to promote what you offer and how much good your organisation is in supporting them. Earn referrals and rule the business with spot-on customer retention strategies.
4. Connect and Cross-sell
Marketing a new product is quite a tough job! Creating a new market and customers requires a lot of brainstorming, digging into the new channels, exploring and experimenting with marketing ideas with a lesser surety of success. But with the support of existing customers, a service manager can definitely pursue them, cross-sell and up-sell the products and gradually acquire new customers by creating awareness. Your loyal customers can act as catalysts to accelerate your marketing approaches and revenue targets.
5. Figure it out with Feedback
A customer-oriented business ensures to pay heed to the user feedback and make most of it. Customer issues are a big treasure — the more you attend them with a positive vibe, the most you can improve from it. Earning the faithfulness of your existing customers makes them participate in the process of improvising your products and retain them by acting on it. They will help you recognise the liabilities, solve the issues and prevent them from impacting other customers as well as develop a strong competitive product to attract the prospects.
It is estimated that existing loyal customers are 4x as likely to refer others, 5x as likely to repurchase, and 7x as likely to try a new offering.
How to reduce retention costs and procure more returns?
Infusing customer retention ideology is going to take your business to new heights of success. Now, the big challenge is to ensure that you are not simply directing all efforts and resources in supporting and achieving CRM (customer relationship management). With the right technology in place, a company can empower its employees to extract maximum benefits. Moreover, the flexibility and availability of bespoke cloud platform match the exact business processes promoting automation and effortless management.
Originally published at www.itouchvision.com on March 3, 2017.