Companies focus on customer retention
You work hard to gain new customers—and you want to keep them coming back again and again. That’s where a strong focus on customer retention comes in handy.
Let’s look at what customer retention is, why it matters, what it’s impacted by, and a few best practices.
What is customer retention?
Customer retention refers to the ability of a company to retain its customers over time, focusing on keeping customers on board via long-term relationships so that they continue to build a relationship with the brand. As a performance and monitoring metric, it helps provide context around how well a business is keeping its existing customers happy and satisfied.
Different from customer acquisition or lead generation, customer retention focuses solely on customers who have already shown interest in the brand, such as those who’ve signed up for a service or purchased a product.
The value of customer retention
Retention rates help companies understand the quality of the customer service they’re providing. If churn rates are high, it’s a red flag that indicates something isn’t going well with the customer experience. Keeping a close eye on retention numbers means keeping a finger on the pulse of the overall quality of customer service a company is delivering to its customers.
Keeping your current customers happy is far more cost-effective than acquiring new, first-time customers. Retained customers are easier to convert than first-time buyers because they already have a foundation of trust with a company they’ve bought from before. Brand new customers, however, often require more convincing when it comes to that initial sale. HBR reports that it's anywhere from 5-25X more expensive to acquire a new customer than it is to retain an existing one. That's why it's crucial to focus on customer retention rates and customer retention strategies.
Customer retention and the customer experience
Retention is related closely to (and influenced by) the customer experience, which includes anything that impacts a customer’s perception and feelings about a company. Customer-facing interactions like support ticket resolution, or building a sense of social responsibility into the brand itself, are just a few of the elements that can affect a buyer’s relationship with a brand. So how is customer retention influenced by the customer experience (and vice versa) and what makes for a loyal customer?
Responsiveness influences purchasing decisions
Customers want questions answered quickly and effectively, without having to wait around or dig for answers on their own. In fact, studies show that 89% of customers believe a quick response to an initial inquiry is important when deciding which company to buy from. Improving response times is one customer retention strategy your team can focus on.
Customer service interactions impact future buying behaviors
A negative customer service interaction can lead to lost customers, which hurts long-term customer loyalty as buyers will look elsewhere when spending money down the road. Data shows that 46% of customers will change their buying behavior up to two years after a bad customer service experience.
It’s important to keep a close eye on these facets of the overarching customer experience when working to improve customer retention. In doing so, you can improve your customer relationships, and in turn, retention. When less-than-stellar customer interactions are delivered across a brand’s touchpoints, customer retention efforts suffer.
Best practices for customer retention
1. Offer speedy first reply times for customer support queries
Data shows that speedy first reply times result in higher customer satisfaction. Even if that reply is just a short message letting the customer know the query was received with an estimate for the projected time to resolution, these notifications let customers know you’re actively working towards answering their question or fixing an issue.
2. Deliver personalized support interactions with context
There’s nothing more frustrating than having to explain an issue to customer service representatives over and over again. Make sure that your agents are equipped with rich, personalized customer profiles to provide context around queries, so that they can speed up the problem-solving process.
3. Establish better customer service workflows
Simple yet highly efficient customer service workflows, fueled by the right forms and conditional form fields, help sort customer queries so that they can be handled by the best possible department and/or company representative right away.
4. Offer omnichannel support to reach customers where they are
Omnichannel support keeps things moving with no extra effort needed from the customer. Offering a seamless transition between touchpoints within the customer journey means you can accommodate customers and offer the support method they like best, whether that’s the phone, live chat, email, etc. Make it easy for your customers to choose the option that best suits their preferred communication medium rather than limiting support mediums to just one or two select methods. Omnichannel support is likely to increase customer loyalty because you're decreasing the effort it takes to reach your support team.
5. Gather customer feedback on an ongoing basis
Giving customers a voice via surveys or by gathering feedback from customer service team members on an ongoing basis means you’re always working to improve the overall experience your customers are having.
Our infographic examines how retailers are building a seamless customer experience by integrating across channels and how they expect their efforts to pay off in terms of customer retention rate and repeat business.