Customer retention is the surest path to business success. The cost of acquiring a new customer is 5 to 25 times more expensive than retaining a current one. Furthermore, repeat customers spend more than new customers, so that increasing customer retention rates by 5 percent increases profits by 25 to 95 percent, Bain & Company research has shown.
These numbers illustrate why customer retention is such an essential part of a winning business strategy. Here are three proven strategies you can apply to digital marketing to boost your customer retention rates and multiply your profits.
In order to improve your customer retention, it’s important to first establish a baseline so you can measure your performance. This means tracking your churn rate, also known as your rate of attrition, which is the percentage of customers you lose in a given time frame, such as over the course of the year. Your churn rate is the complement of your retention rate: the lower your churn rate, the higher your retention rate.
To track your churn rate, you must first collect and analyze your customer data. This usually requires doing a data audit to determine what your customer data consists of and where it is to be found within and without your organization. The most efficient way to collect your customer data is by using a customer relationship management tool with analytics capability. Infor CRM training videos can help you learn how to use your CRM analytics to study your churn rate and other vital customer data.
Once you’re established your churn rate, you can start monitoring it as you adjust your customer retention strategies. This can enable you to know what adjustments are working so you can make continuous improvements.
In order to boost your retention rate and lower your churn rate, an important step is mapping out your customer lifecycle and how it supports your customer retention and repeat business strategies. Your customer lifecycle maps out all the stages of your customer’s journey, from the time they first become aware of your brand through the time they make their first purchase, as well as beyond their initial sale as they continue to interact with your customer service and sales teams.
For successful customer retention, your customer’s lifecycle should include marketing efforts beyond your initial sale, such as upsell and cross-sell campaigns. You should also include post-sale touches with the customer to check their satisfaction with your product and find out how likely they are to refer you to others. Insights from Analytics provides a seven-step customer lifecycle map you can customize to develop your own customer lifecycle map.
In order to maximize the effectiveness of your customer lifecycle, you should use market research into your customer base to develop offers that will appeal to your loyal customers. Find out what your customers want by identifying their pain points and what benefits appeal to them and then create offers that appeal to those needs.
The best way to find out what your customers want is to ask them. You can solicit this information by using a number of tools, including mobile texts, your social media profiles, your email subscriber list, your blog and your marketing promotions.
Tracking your churn rate, mapping your customer lifecycle and developing offers for loyal customers are three proven strategies for customer retention. By applying these strategies, you can retain more customers, generate more repeat business and maximize your profits.