Customer Retention 101: How to Scale Up Your Business with Current Customers
Customer Retention 101: How to Scale Up Your Business with Current Customers
In order to scale your business, you need to find clients, sell, and sell even more. This might cause you to have a strategy focusing on acquisition.
However, it’s already widely known that keeping existing customers is a smarter, cheaper way of growing your business. Plus, developing a robust pool of returning clients is where many companies receive their largest cash flow.
Even if you have never made contact with a customer after a sale, it’s not too late to start engaging with them. Keep reading to learn more about the importance of customer retention and how you scale up your business with current customers.
What is Customer Retention?
Customer retention is the capacity of your business or product to maintain and increase the number of customers who purchase repeatedly.
It is supported by a group of activities and strategies that increase the continued purchase of a product and decrease the chances of customers defecting to alternative solutions. Having a retention strategy allows your business to improve on its acquisition results, and maximize the profit you make per existing customer.
Why Customer Retention Matters
Acquiring customers for your business is an obvious task for every entrepreneur. However, there is so much value in retaining those customers that it’s normal for companies to have a dedicated force for customer retention.
Statistically, your salesforce is 40% more likely to close a deal with an existing customer than with someone who just learned about your product. Existing customers will also spend 31% more on your business than prospective ones. In situations where your business introduces a new product, an existing customer is 50% more likely to try it out than a potential customer.
If you’re looking to grow, revenue-based statistics also report that increasing customer retention efforts by just 5% can increase profits by 29-95%. The fact that customer retention costs five times less than customer acquisition just makes this whole concept even better.
So, how can you start building an effort towards keeping your customers satisfied and happy enough to come back? Recognize their journey and provide more value every step of the way.
Customer retention also has the potential to be an acquisition channel. This happens through referrals. As your customers grow with your brand, they become advocates of your products or services and share them within their communities.
Measuring Customer Retention
Your customer base’s attrition rate is the opposite of your retention rate. For a given period of time, you can find out your retention rate by subtracting the amount of newly acquired customers from the end-period number of customers. Divide that by the starting number of your customers and you have your rate.
If you start with 400, gain 50, and end with 440, that’s (440-500)/400, showing you a retention rate of 88.63% for that specific period. This means you were able to retain 88% of your existing customer base for that period.
Another helpful statistic is your repeat customer rate. This is the number of customers that purchased more than once divided by the number of unique customers. Refer to this metric to gauge how well your retention strategies are working.
You may also use your average order value to find out the average amount of money a customer spends per transaction with you. Compare it with the amount you spend to retain a customer, and you have another helpful metric to show you if your efforts need improvement or not.
Customer Retention Tips
Now that you know how to measure the performance of your customer retention strategies, here are some helpful tips you can use in building or improving your strategies.
Focus on Creating Personalized Experiences
Aim for every transaction to be a personalized experience for every customer. Be available and accessible to clients who may have questions. Consider hiring a virtual assistant to face clients when others are unavailable. More importantly, develop a customer profile so you can anticipate the kinds of customers you will get, and be able to accommodate them well.
Other businesses offer an option for their clients to create accounts, so they may participate in personalizing the experience for themselves. This, however, may entail high expectations from clients that their every need should be met. Map out your business and your customer profile to discover how you can do this for your business.
Keep In Touch
You might think it’s intrusive to keep the conversation going or start one, after the purchase. However, a little hospitality goes a long way. Staying in touch helps you reduce your attrition rate.
Connect with your customers through social media, a mailing list, or even a survey. You can also gently remind them about your customer service channels for some after-sales care. This will eventually be the channel through which you encourage them to come back by educating them about your other offers.
Social media alone offers multiple ways to stay in touch with your clients. You can ask them to subscribe or follow or like your page, you can build an online community around your brand, and you can even message them regularly there, as much as you would email.
Develop Excellent Customer Support
Customer satisfaction is your target. Customer support offers you a way to hit that target all the time. A solid customer support program covers the entire experience from pre to post-sale.
By developing a solid customer support system, you’re allowing your customers to maximize the benefit that your solution offers. Keep in mind that resolved complaints lead to higher customer satisfaction. Make sure your program aims to do just that.
Offer Credit for Repeat Orders
Offering discounts can make business owners cautious. However, it’s a strong way to encourage your customers to repeat their purchases. You can hand out a repeat-purchase discount coupon or code to each customer. Consumer brands typically have programs where you can trade old items for discounts, discounts for refills, or loyalty-based discounting. Think about how you can apply this to your business.
Always Ask for Feedback
Remember how the goal is to please existing customers so that they come back and purchase again? Don’t be shy to ask for feedback every time. Their opinion on your service or product will help you tailor the entire experience to their liking. Collect feedback from as many clients as you can and find out what they’re looking for apart from what you’re already offering.
By making your customers feel that they are heard, you’re encouraging them to be very active participants in your brand. Asking for feedback shows them that you care beyond getting their money in exchange for a final product. Asking for feedback shows that your goal is to provide a solution and you want them to help you make it the best solution for them and others.
Usual ways of getting client feedback include surveys and suggestion boxes. Face-to-face transactions allow this to take place right after a sale, especially in the service industry. If you’re able to get contact details, you may follow up with your clients a few days after the sale with a survey or some questions.
Social media platforms have also incorporated public polls so you can gauge your audience’s level of satisfaction with your brand. If you can innovate a better, more engaging, and rewarding way of getting client feedback, that’s even better for your business.
Your current customers are stakeholders in your business. It’s in your interest to keep them interested in your product. If you develop a strategy that forges a strong relationship with your customers, your business will have more to leverage for its growth.
Customer retention may seem like a huge undertaking, and it is. However, it more than pays off well. It literally makes more and costs less than customer acquisition and conversion.
Consider delegating acquisition and retention to respective virtual assistant teams. This way, you can focus on figuring out more ways to scale your business while your profit-making activities are still being implemented.
If you’re interested in scaling your business with virtual assistants, fill out this form, and we’ll let you know what kind of virtual assistant services can help you with customer retention.
More Articles From Virtudesk:
Share this article
Feb 14, 2024
7 Proven Tips and Strategies to Craft Compelling Content For Your Beauty Brand
Feb 7, 2024
14 Reasons Personal Trainers And Coaches Should Hire Virtual Assistants
Jan 30, 2024
Everything You Need To Know to Level Up Your Networking Strategies This 2024
Jan 29, 2024
13 Key Benefits of Hiring Your Blogging Virtual Assistant
Meet our Most Trusted
Partners & Clients
Byron LazineCo-Founding Chief-of-Operations at BAM (Broke Agent Media)
I’ve been using Virtual Assistants for years throughout all of my companies. Once we found Virtudesk the process got even easier and allowed us to scale out our hiring. Highly skilled and accountable professionals. 100% recommend!
Rebecca Julianna JamesRealtor / Content Creator
Before getting started with Virtudesk I had my doubts that they would find what I was looking for. I needed a very particular person to add to my team and let me tell you I am highly pleased! My virtual assistant Myril is the best! I am excited to grow my socialmedia accounts with her. Thank you Virtudesk!
Chelsea EricksonRealtor La Belle RE Group
I am very happy with the assistance Virtudesk is providing for my real estate business. This is a newer position for my company and we are working through the creation and efficiency.