It’s Good to looking for new customers but retaining the old customer is key to success. Customer Retention is one of the underrated strategies which businesses neglect often.
In this Blog, we will discuss the Importance and Strategies for Client Retention.
What is Customer Retention?
Customer Retention is the process of converting your existing clients into loyal customers. So whenever they are in need they will automatically be directed to your product and services.
According to research from Harvard Business School, increasing customer retention rates by just 5% can grow a company’s profits by 25-95%.
And, If you not paying attention to your existing clients it means you are losing an opportunity to expand your Business.
Importance of Customer Retention
Customer Retention plays a vital role in Recurring Revenue. Companies are generating around 30-35% of revenue with their existing clients.
There are two major Importance of customer retention.
1. Cost-Effective:- Acquiring cost is much lower than we are spending on new clients. You can have your existing clients pay for the services and product with some calls and by providing the right customer support.
2. Loyalty:- It increases the Loyalty of the clients towards your product and service. And these loyal clients also do mouth-to-mouth marketing of your products or services within their family and professional network. Which leads your business to earn more revenue with the help of existing clients.
Formula to Calculate Customer Retention Rate (CRR)
It is easy to calculate the CRR and the formula is:
CRR= ((E-N) /S) *100
CRR= Customer Retention Rate (we have to find)
E= Customers you have at the end.
N= Customers acquired during the period you’re measuring
S= Customers you have at the start.
Strategies For Customer Retention
1. Provide Value:- Don’t just sell your product provide value instead. Learn more about your client’s businesses and offer the right solution for their businesses and educate them about all aspects of the process.
2. Offer For Existing Customers:- Companies are offering discounts to lure new customers but if you offer discounts to the existing clients then it will help you to generate more profit without spending too much on your Marketing. And, It will increase your client’s trust towards your product/services.
In return, you can ask them to post an appreciation post on their social media profile so you can create your product/service image in your client’s personal and professional network.
3. Customer Support:- Providing support after sales is one of the big factors in client retention. If you have a product then offer demo and installation services and Repair services with pickup and drop.
Build a lenient system so a customer can easily register their complaint and track their progress. Provide online support for instant solutions and also provide customer care support so they can get all the information that they wanted.
4. FeedBack:- Set up a time to circulate your feedback form among your existing clients. Then call them and ask for their feedback about your product and the hurdles they are facing with your product/services. Take note if they provide some information on what they are missing and try to solve their hurdle ASAP.
5. Free Trials:- Free trials let customers the upper hand to check your services/product before buying it. If your product/services are providing the same values as you mentioned. Then the chances are high you’ll get a client for a long term.
6. Early Access:- Providing early access for the new features or early access for the sale will boost their attention towards your product/services.
Clients also feel fortunate that you are providing early access to them only. And it will create a good bond between your business and clients.
It’s an Act of balancing that totally depends on transparency and loyalty. If you are loyal to your customers and provide the right information then you can have them for a long period cause clients will stick with you if they connect with you. So be loyal and try to educate your clients and help them to achieve their goals.