Poor customer retention is like filling a bucket with holes in the bottom: one might keep adding on to compensate, but one would be far better off figuring out what caused the holes and how to fix them up and gain customer loyalty.
Customer retention is a critical element of building a sustainable business. According to a Harvard Business School study, boosting customer retention rates by 5% raises a company’s profitability by 25-95%.
As per statistics, 47% of global customers expect better customer service from their favourite businesses than they did in the previous two years.
“Expecting outstanding experiences everywhere, every time has become the new worldwide standard for customer service.” “In a few years, they’ll take this several notches higher,” says Preethi Bridgeman, Director of Solution Engineering (Asia Pacific, Middle East, and Africa) at Freshworks.
Why is Your Customer Loyalty Decreasing?
1. Failure to meet customer expectations
Even for organizations that invest considerably in enhancing their customer service, declining customer loyalty has been a concern.
Customers don’t care if the service they’re getting is better than a year ago; they look at other ‘best-in-class’ organizations as a guide.
2. Customer loyalty programs that aren’t working
Many businesses regarded a loyalty card as a quick way to build customer loyalty. In reality, recent studies indicate that loyalty cards reduce profit margins for current clients, causing businesses to lose money rather than gain customer loyalty.
3. Failure to focus on the overall customer service experience
When a company is organized into departments, each department is invariably in charge of a particular facet of customer support.
There is a lack of communication frequently between sales and after-sales staff, which leaves consumers with poor customer support.
4. Lack of distinctive consumer relevance
When a consumer is disloyal, they are expressing their dissatisfaction with a product or customer service that is no longer relevant to them.
Since not enough thought was given to what role the brand should play in the customer’s life, that particular product or service did not stand out from the competition.
What Exactly is Customer Retention?
Customer retention is a statistic used by organizations to track customer loyalty over time and assess overall success.
Companies will adopt numerous techniques to decrease the number of clients lost in a given period and improve their experiences to guarantee that they remain loyal to the company.
How is your customer retention rate calculated?
To calculate the customer retention rate, divide the total number of new customers by the number of customers acquired with all customer retention strategies at the start of the period.
For example, if you started the year with 100 customers and gained 20 new customers but lost 10 at the end of the year, your customer retention rate would be 90% with increased customer loyalty.
Seven of the Best Customer Retention Strategies
Companies that retain consumers can assist them to gain greater value from a product; encourage them to offer feedback in order to influence possible new customers; and begin to establish a group of similar customers or users with whom they can interact.
1. Implement customer service tools
If you own a small to medium-sized business (SMB), your customer support team may be small. However, as the client base grows, customer service demand may increase, forcing you to extend the bandwidth of your customer support team.
Hiring is expensive, so many companies rely on technology like CRM to augment their customer service needs.
2. When you make errors, apologize
In business, mistakes happen no matter how hard you try to avoid them. Whether it’s a data breach, an outage, a billing problem, customer support or anything else, a mistake might put you at risk of losing valuable customers if you don’t address it properly.
3. Provide consumers with convenience
Whatever sector your company is in, you want to make your product or customer service easy to use. Make your goods and customer service as widely available as possible.
Determine your consumers’ desires and habits, then design tools and processes to enable them.
It’s up to you whether you use an app or more traditional techniques to gain customer loyalty.
4. Make use of customization to provide good customer service
Customers want to be treated like humans, not simply through personalized advice and service, but they also want to see the emotion behind your brand.
If there is no emotion behind your brand, then you cannot expect customer loyalty.
To begin with, establish your audience personas and interact with them through their chosen channels. It makes little difference if it’s email, Facebook, or Twitter, as long as it’s where their attention is focused.
From there, you should urge clients to contact you directly through that channel. If they like the customer service, the probability of gaining customer loyalty is higher.
5. Educate your clients
Just because your customer has made a purchase from you does not imply that you should give up on closing the transaction.
Give people more alternatives than ever before, go the extra mile and provide them with something important, such as a free instructional program and best customer support.
6. Thank your clients
To that point, saying thank you to your consumers outside of an email campaign or a customer purchase goes a long way toward creating a beloved and remembered brand.
You can gain customer loyalty this way.
7. Create trust among your consumers
Two things are true when it comes to establishing trust between your company and its clients:
- If people purchase from you, don’t assume they trust you.
- Building trust takes time.
When making a purchasing choice, 81% of customers think trust is a significant aspect of their decision.
Building trust is not a one-size-fits-all strategy that can be implemented quickly by any organization. After all, trust is defined as “a deep conviction in the dependability, honesty, competence, or strength of someone or something.”
For the reason that reliability is an important aspect of establishing customer loyalty, the organization should continually provide value to clients.
A new customer loyalty card or a flashy new advertising campaign will not fix the problem of consumer loyalty.
The company’s leaders should have a clear vision of how the company should operate and provide the customer service team with a help desk tool to give quality customer support.
If a business wants to improve its customer service, they must get the Freshworks HelpDesk software from Exabytes and improve their customer retention strategies.
Contact an Exabytes Professional now for further information.