Many individuals and SMEs face continuing financial struggles due to the impact of the global coronavirus pandemic. Maintaining optimum client retention is harder than ever as many people seek to tighten their purse strings and cut unnecessary costs.
Whether you operate in the B2B or B2C sphere, client retention must form an integral part of your business strategy for 2021 if you want to ride out the storm and thrive long-term.
How Important is Client Retention?
It costs seven times more to acquire new customers than to retain existing ones, yet many businesses focus more on acquisition than retention.
A business’s customer retention rate is a good indicator of its success at doing what it does, be that selling products or services. Excellent service means higher customer satisfaction levels and better retention rates.
High levels of retention increase return-on-investment (ROI), boost customer loyalty and help attract new customers (via referrals from satisfied customers). Just a 5% increase in customer retention can increase revenue by 25-95%. Long-standing customers typically spend more than new customers too.
If you’re ploughing all your time and money into client acquisition, it might be time to divert some of those resources to retention strategies.
How to Increase Customer Retention
- Set Expectations from the Start
Client dissatisfaction generally arises when a consumer fails to receive the product or service they expected to get. This could be due to sub-par products, poor customer service, or perhaps the client misunderstood what was included in the service they purchased.
The best way to avoid this happening is to make sure that you and the client are on the same page from day one – do you both have the same understanding of what they’ve paid for? How you achieve this will depend on the nature of your business and your target client base. Potential strategies could include:
- An effective onboarding process
- Clearly worded contracts and policies
- A transparent pricing system
- Providing various means of communication (so that people can ask questions)
A satisfied customer is much more likely to remain a loyal one.
- Show Your Clients How Much You Value Them
Make your client feel like more than just a number or another sale. If you have a Customer Relationship Management (CRM) system, encourage staff to make notes that will help establish a connection with loyal customers – have they mentioned a favourite football team or a poorly pet? Enquiring about such things can have a surprisingly positive impact on clients and their relationship with the business.
Corporate gifts are another effective way to let your loyal clients know that you value them. Tailor each gift to the client’s specific needs, preferences and value – sending an extravagant gift to a new customer smacks of desperation. Does your client have a lengthy commute to work? An eco-friendly coffee flask in a sleek design will go down a treat. Or perhaps they’re a real foodie with a hungry family to feed? They’ll be surprised and delighted to receive a luxury cheese gift hamper in the post.
- Provide Updates on New Products and Business Growth
Keep your clients informed about the company roadmap. There may be something in the pipeline that will encourage a client to resubscribe to your service or upgrade their current package. Boosting customer lifetime value will increase customer retention and vice versa.
A company that is continually evolving and seeking to improve its service is more appealing to clients. They will be less concerned about looking around for a more up-to-date or “on trend” provider because they’ll feel confident that you work hard to stay ahead of the curve.
- Offer Added Value and Keep Clients Engaged
Don’t focus purely on the sale. Instead, aim to build relationships via ongoing engagement with your clients. As mentioned in the preceding points, by providing new products, services, and client gifts such as those offered by Packed with Purpose and similar companies, you can constantly adopt one of these strategies or combine them to build a strong relationship with your clients. You can also find out where your clients hang out on social media and set up accounts on the relevant channels. To keep existing and potential clients engaged, post regularly and use a format that appeals to the – video content is particularly powerful.
Email marketing is a great way to keep in touch with your client base. Establish sequences for clients who are at different stages of the buyer’s journey. You can send emails to upsell, cross-sell, retain customers at the end of their subscription service and provide helpful information. Not all of the content you produce needs to be a hard sell; in fact, it’s better if it isn’t. Sharing free content that is truly helpful to your client base will earn their loyalty.
Client retention will be one of the most crucial strategies for thriving businesses in 2021. Done well, it can pack a mighty ROI punch as it costs much less than client acquisition yet has the potential to boost revenue significantly. If you’ve been focusing on winning new customers – which is, of course, important – take a moment to step back and review what you’re doing to continually surprise and delight your existing client base. Could you do more?
