Customer Retention

What is Customer Retention [Top 7 Customer Retention Strategies]

Aayushi
By Aayushi | June 25, 2024 8:46 am

Business is not only about gaining customers, it is about gaining, serving, and most importantly retaining customers. Customer retention is the key to building a loyal customer base, and the only way that can be done is through providing a seamless customer experience. There are various strategies one can apply to retain a customer and improve the customer base, such as employing a chatbot to enhance service interactions. But, for that, let us first understand what customer retention actually means.

Also Read: Calculate Customer Retention Rate

Table of Contents

What is Customer Retention?

Customer Retention is the ability of a business to retain customers and make them repeat buyers after a purchase and prevent them from switching over to alternatives made available in the market by competitors. Customer retention focuses on already existing customers who have made a purchase with the business before and not new and potential customers.

The process of customer retention begins from the first meeting with the customer and continues through the lifetime of relationship with the customer. It defines the ability of a business to develop a sense of loyalty in the minds of its customers towards products or services offered by it.

The Importance of Retaining a Customer

It may seem that customer acquisition should be prioritized as a goal instead of customer retention. However, while customer acquisition is important, customer retention has its own benefits which prove to be a game changer for businesses. Some of the benefits of applying customer retention strategies into your business are-

  1. Cost and Time Effectiveness- Retaining customers is far more cost effective than acquiring new customers as there is reduction in sales outreach, marketing and advertising costs which account for a huge part of a business’s expenditure. The customers which are to be retained already have an idea about the products and services offered, thus the information search step in the customer buying process need not be repeated which saves both costs and time.
  2. Loyal Customer Base- Applying customer retention strategies helps a business to create a feeling of trust in its customers with respect to the products and services they have bought and availed respectively. This, in turn, builds a loyal customer base, which improves the business’s social standing and inculcates good word of mouth among new potential customers as well. New Customers would not be able to provide as much value to the business profits and image as retained customers can in the long-run.
  3. Competitive Advantage- Having a good customer retention rate can help you gain a competitive advantage over competitors due to an increased number of repeat customers with the business, reducing sales and customer base of those in competition.
  4. Stronger Customer Relationships- When a business works towards retaining customers, it focuses on creating a delightful customer experience by providing incentives, good after-sale services and loyalty programs. This slowly builds strong relationships with the customers with each interaction. Strong customer relationships also induce a smooth feedback loop.
  5. Increase in Revenue- Happy and satisfied customers keep coming back to a business for repeat purchases, and thus revenue increases. These customers also bring in new customers to try out products or services of the business, increasing the revenue and profits even further. Besides this, market share of a company also increases if there’s goodwill as investors like to deal in companies with a loyal customer base.

Top 7 Customer Retention Strategies

We have figured out what customer retention means and what its benefits are. Now comes the real question- How to Retain Customers? To understand this, let us look at The Top 7 Customer Retention Strategies-

  1. Quick Support- Responding to the customer promptly and empathetically to ensure a speedy resolution of their queries is utmost important. Even if a ticket is difficult to resolve at the time, responding with texts like “We will get back to you soon” or “We have forwarded your query to the concerned person” go a long way. They build a good brand image in the minds of customers and they feel heard and valued. It is also advised to mention the time frame within which the query will be resolved so that the customer can accordingly form expectations. This can be made easier using AI-driven softwares like Appy Pie's Live Chat Software, which helps engage with website visitors in real time and give prompt assistance to customers.

  2. Solicit Feedback- To assess what performs well and what does not, it’s the best practice to directly know from the customer. Inviting feedback from the customer acts like a performance check for the business. It provides clarity in terms of which new practices need to be adopted, which existing ones should be modified or made redundant. Soliciting feedback helps both the business and the customers as they feel that their opinion is heard and can look forward to changes made in the customer support process for a better experience. Follow up communication is also necessary to gain constructive feedback and make necessary changes to smoothen the customer support process going ahead.
  3. Rewards and Incentives- Customers like when they are rewarded for sticking to the company and purchasing its products and services. Rewards can be in the form of incentives, offers, discounts and incentivised loyalty programs. These incentives are a major driving factor in customer loyalty and motivate them even further to continue buying from the company. Customer Retention is possible only when they feel special and valued and rewards are a good way of making them feel so. Sending messages to customers who have subscribed to newsletters, emails and notifications from the company, informing them about special offers, loyalty points and discounts that can be applied to their order at the time of checkout is another good way.
  4. Personalized Communication- Communicational messages, when personalized according to a customer’s previous purchases and involving a personal touch in them prove to be much more effective in building a sense of trust and belongingness within the customer. For example, messages starting with the customers’ names might reach out to them more personally, thus building a good image in their mind. To provide personalized communication facilities, Appy Pie's Chatbot Builder can be used, which has various customization options to generate tailored responses aligned with a particular customer.

  5. Training of Staff- Well-trained staff can handle queries more effectively as they are empathetic towards customers, have good communication skills and are efficient in problem solving. Customers prefer to converse with polite staff persons who help actually find meaningful solutions to their problems. Employees can be trained on understanding the customer buying journey to properly assist them at each stage and effectively conversing with existing, new and potential customers to smoothen the overall workflow of customer service.
  6. Social Listening- Social listening helps analyze the customer sentiment towards the brand by following the comments, mentions and opinions made by the customers on social media about the brand. This can help businesses know what the customers expect from it and what they actually want and can leverage this information to create a better customer experience and meet customer expectations. Furthermore, pain points in the customer support strategy used by the brand along with shortcomings in product or service quality can also be ascertained.
  7. Reaching Customers in their Comfort Zones- It is always recommended to use omni channels for customer support provision since it is convenient for the customers and there’s no limitation in terms of number or types of channels used by customers and businesses for reaching out. One can use Appy Pie's omnichannel contact center to combine all related customer interactions on various channels like social media platforms, mail, SMS etc. into a single conversation thus improving overall customer experience.

Conclusion

The process of customer retention and building a loyal customer base is not a one day task. It takes time, effort and application of client retention strategies to actually see results. However, there’s no need to worry! Including the above mentioned strategies into the customer support structure and applying them to create a seamless customer experience using various products offered by Appy Pie can massively help in achieving results faster and efficiently.

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