Top businesses that are serious about winning understand that there are many benefits to customer retention. It is the ability of a business to keep customers coming back.
While this does not seem important, retaining customers who have already done business with you is cheaper than finding new ones.
This is because you have already developed a relationship with them, and they know how your brand works. Moreover, these kinds of clientele will be more likely to spend money on your business and recommend your services to others.
This guide will discuss customer retention, how to convert unhappy customers to loyal ones, and more. Let’s begin with a few ways customer retention can help you win in the competitive world of business.
Now, let’s get started!
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Why is customer retention so important?
We all know how important customer retention is to now only help your business win today, but also to remain competitive long into the future.
So let’s take a look at some essential reasons why it’s so important:
1. Increased customer loyalty
Customer loyalty is essential for business growth and a good customer retention strategy can make this happen.
Loyal customers will continue to buy your products and services and advertise for free to their friends. A combination of these factors can ultimately lead to consistent revenue and profit for your business.
Moreover, loyal customers give you an edge over competitors. Since they’re loyal to your brand, it is more difficult and sometimes impossible for your competitors to poach them.
2.Reduces customer acquisition costs
You’ll need to spend some money on marketing and other strategies to get new customers for your business. While this is fine if done sparingly, it can negatively affect your budget if it is something you do regularly.
Fortunately, you can avoid this using a good ecommerce customer retention strategy.
If your valued customers are happy with your offers, they are more likely to stick with you. This means you won’t have to always invest in drawing new customers, allowing you to allocate your budget to other activities.
3. Better upselling opportunities
Upselling is when you encourage your most loyal customers to buy a more expensive or upgraded service or product. This will help to increase your profit in the long run. Now, you may be wondering, what does customer retention have to do with this?
Well, it is easier to upsell a customer you have already retained than new customers. Existing customers will be more likely to purchase an upgraded product since they already trust you. Ultimately, you get more sales and improved business growth.
4. Increase company profit
Revenue in business is very simple. The less you spend on running costs, the more you keep as profit. Customer retention, as earlier mentioned, prevents your running costs from going up.
What’s more, clients who stay behind and know how you operate are likely to spend more on your services.
This consistent inflow of cash will help boost your profit, which you can channel to other parts of your business. In worse cases, if the customer fails to buy products as frequently as you want, the sales from upselling would make up for it.
5. Better customer insights
Understanding customer behavior, needs, and preferences is a great way to grow your business. While you can get this information from new customers, it may not be as accurate as you’d want.
In contrast, studying long-term customer data will give you deeper insights into what drives loyalty and satisfaction. Moreover, loyal customers will be more willing to respond to surveys and interviews.
These are essential for getting insights, and some new customers may be unwilling to respond. You can then use these insights to improve your customer service interactions and retain customers.
6. Improved marketing efforts
Word-of-mouth is one of the best forms of marketing for your business. However, while it is effective, it is extremely difficult to achieve. Great ecommerce customer retention strategies can make this much easier.
Those who are happy with how you do business and your services will gladly share their experience with others. This means more customers for your business at no cost!
7. Increase in employee morale
A good customer retention strategy can be beneficial in improving employee morale. So, how does this happen? When employees see that the strategies they implement help to improve customer loyalty, it makes them feel motivated.
There is nothing worse than feeling all your efforts are in vain, and this applies to employees too.
A higher success rate in customer retention can makes it obvious that their efforts are effective – leading to a higher productivity and more profit for your business.
8. Better brand reputation
The online and offline reputation of your brand directly influences your profit and ability to get new customers. Great ecommerce customer retention strategies can help in improving your company’s reputation.
Here’s how this happens:
If customers are happy with what you have to offer, they’ll share these positive experiences with others. This will ensure others see you in a positive light, making them more likely to work with you.
The opposite also applies in this case. Unhappy customers who don’t stay will also spread the word, giving your competitors an edge and affecting your growth.
How to retain unhappy customers?
By now, you already know the damage having unhappy customers can cause your business. It’s one thing to ensure new customers stay, but you’ll need to first learn how to deal with unhappy ones.
Every business has unhappy customers at some point. But the difference lies in how you deal with them. If you handle the issue properly, you can easily transform them into satisfied customers who’ll inform others about your business.
So, how do you achieve this?
Here are some of our key ecommerce customer retention strategies:
1. Remain calm
An unhappy customer will mostly be unable to control his or her emotions. This is understandable, and you should not see it as an attack on your person.
If you do, it can negatively affect emotions and cause you to become angry too. This will eventually worsen the situation and make it hard to help the customer with their problem.
Staying calm is a better approach at this point. It may be helpful to have guidelines for your team to follow when dealing with these types of customer issues.
This gives a direction that will help in managing the situation in the smartest and most unbiased way possible.
2. Listen actively
When people are unhappy, they’ll most likely want to vent their frustrations at that point. If you don’t listen to them, it can result in a more heated exchange and build-up anger.
This also applies to customers, which is why whoever handles the issue must learn to listen with both honesty and empathy.
Even if the first thing that comes to your mind is to defend yourself and business, hold on till the customers expresses themselves. Let them know you are listening without interruptions before trying to provide any solution.
This will help in making customers feel valued and heard.
3. Take responsibility
If the mistake was from your end, it is important to take responsibility. Apologize sincerely to the client for any issues the problem may have caused. We suggest you do the same, even if you did not directly cause the problem.
This shows you understand what they are going through and are willing to correct it. Taking responsibility also proves to the customer that you are serious about satisfaction and keeping them around long-term.
4. Provide solutions
Now, it’s time to provide a solution after understanding the customer’s problem.
We recommend you work alongside the customer to come up with a solution that meets their unique needs. Look at various alternatives to find which works best, such as offering a full refund, replacement, or discounts.
Offer the options to the customer and let them choose which works best for them.
While this may seem significant, it lets the customer know you value their input in the resolution process. Moreover, it will ensure you arrive at a solution that provides higher customer satisfaction.
5. Address issues fast
A prompt resolution of customer’s problems can help you prevent your brand from attracting more negativity. If you let the issue linger instead of quickly resolving it, the customer can become more frustrated.
Most times, it’ll lead to them avoiding future business with your brand. Set up clear timelines and keep the customer informed about the resolution process.
If you are refunding or replacing a product, let them know exactly where the product is using real-time updates. This sort of commitment shows the customer that you value their concerns and will do all it takes to make it right.
6. Follow up quickly
Your work does not end after resolving the problem. You’ll need to follow up to make sure you have a satisfied customer. We suggest calling them by phone or sending a personalized message to find out if they are happy.
While this is unnecessary, going the extra mile will show that you genuinely care about customer satisfaction. It will also help transform the unhappy experience into a positive one and improve your chances of retaining them.
7. Learn from mistakes
At this point, you’ll want to take time to identify things you could have done differently.
Even if you did not cause the problem, there were probably steps you could have taken to diffuse the issue. Simply opening your lines of communication or having a laid-out plan could have prevented this.
If you are willing to, there is always something to learn from your mistakes. Being open with your customers will also be beneficial, as it can help repair an already damaged relationship.
Note that there are instances where it’ll be impossible to satisfy an unhappy customer.
Sometimes, it could just be that they are unreasonable or unwilling to work with your solution. If you come across these types of customers, it may be best to walk away, especially if they become abusive.
Unfortunately, you can’t always win over an unhappy customer.
Once you have won them over, there are other strategies you can implement to ensure that they stick around. Keep reading as we take a deeper look at a few ways to boost customer loyalty.
Essential customer retention strategies
Keeping customers happy and engaged for the long-term needs a clear strategy. Here’s a few of the best our there:
1. Use freebies to reward loyalty
One way to retain customers is to reward those who stick around. Let me explain this using a scenario. Presuming you regularly get your inventory from two companies. Both are reliable, but one of them regularly offers discount codes and special offers.
If you had to pick from both, which would you choose?
If you are like me and enjoy free stuff, it’ll be the one with the discounts and special offers. Even if you aren’t, many customers are, and they’d rather stick with a business that offers freebies for being loyal.
There are many types of freebies in addition to the above, including invites to VIP events, early access to new products, and loyalty programs. Choose one that’s within your budget and watch your customer retention rates increase.
2. Use referral programs
A referral program involves rewarding existing customers anytime they spread the word about your products or services. This offers two benefits: boosting customer retention and getting new customers at no cost.
People are more likely to buy from you if they are convinced by someone they already trust. Existing customers will also be willing to do this for you since they trust your business and can claim a reward in the process.
Referral programs could offer rewards like free cash, discounts, and credits.
3. Offer omnichannel support
I once wanted to buy a product from an online site. I kept getting stuck during the process and contacted the team using the email address provided. However, I did not get a response. I looked for a live chat or telephone number and could not find any.
Eventually, I abandoned the cart and bought the product elsewhere.
This is the danger of not having omnichannel support. If your business does not have various outlets for getting help, you will lose out on prospective customers.
In addition, omnichannel support makes it easier for customers to reach the customer service team using the option they prefer.
4. Regularly collect feedback
Customer feedback is another important tool for boosting customer retention. Getting direct feedback from your customers is important if you want to know their pain points.
To do this, use simple surveys with Yes/No questions after a sale or resolving a ticket. You can take things further by asking open-ended questions if the customer is willing. This will give you insights into how customers feel and how to adjust.
Note that working on feedback is as important as getting it.
Make sure you address your customer complaints, as this makes them feel heard and valued – ultimately encouraging them to stay.
5. Create a strong community
Set up a community where loyal customers can share their experiences and interact with one another. This community can also serve as a place where potential customers can learn more about your offerings.
Moreover, it gives you insights into how customers feel and how you can adjust to meet their expectations. Ultimately, it will result in you quickly dealing with concerns and keeping customers long-term.
Conclusion
Developing an extensive customer retention strategy is an important part of generating frequent revenue in your business. We’ve provided you with key strategies to help you improve customer retention today.
Remember that customer retention is a continuous process, as unhappy customers can leave at any point. Make sure you combine two or more of the strategies discussed above and watch your churn rate drop.