22 Examples of Customer Retention Strategies That Actually Work

Posted by

“Most businesses don’t realize that customer retention begins at home (your company) by making sure your staff is working in the right environment,” says CJ Xia of Boster Biological Technology. “And building a relationship with them will only be a step ahead for them, but it will translate into their relationship with your customers. Once you’ve ticked that box, you can move forward on increasing retention.

Personalized experiences are no longer a nice-to-have — today, app users expect and demand them. So, the better your app meets their needs, the lower your churn rate will be. A 15% monthly churn rate means you lost 15% of your user base during the month.

improve customer retention rate

However, a rule of thumb is that a higher retention rate is generally better. It indicates that a large proportion of your customers find your product or service valuable enough to continue using it over time. A popular metric is the N-day retention rate, which measures how many users are retained after a specific day from the time they signed up. That includes both performance-related measures, like a decrease in repeat sales or purchase frequency, as well as analyzing each touchpoint in the customer journey. “They calculate how many of our daily/monthly orders are completed from repeat customers, which helps us know that our retention rate is growing,” he added. This means that when you begin a relationship with a customer, make sure they know what they’re getting and what they can expect.

In addition to one-on-one chats with customer service and sales reps, they offer online consultants who can advise you on any outfit. When customers have a positive support experience, they’re more likely to remain loyal customers. A 100% customer retention rate means you did not lose even a single customer, while a 0% retention rate means you lost all of them. Customer Lifetime Value measures how much revenue is generated by a single customer from individual products/services or through upgrades. You need to know the benchmarks for your own industry before you alter your retention strategy in any way. Finally, personalize your communications based on the customer’s buying history and preferences at every stage of the relationship.

Or, free shipping and returns as well as additional price-related perks for frequent shoppers (Madewell does this well with their Madewell Insider program). Here are a few more reasons why customer retention is so important to the overall success of your business. “I recommend regularly surveying your whole customer base,” says Nikola Roza of Nikola Roza- SEO for https://www.xcritical.in/ the Poor and Determined. “Surveys are great because they will show you what the common problems are, so you can fix them proactively and before churn happens. As I work for a SaaS firm, here is an example to improve online customer retention. Sending triggered reminders to your user’s home screen is a handy tactic to encourage engagement and ensure repeat visits.

You may find that a strategy that works well with one customer segment may not work as well with another. Managing your CRR confers several important benefits which can directly benefit your bottom line. Purchase frequency tells you how many times customers made a purchase from you within a certain time period and is another strong indicator of customer satisfaction and habits. Customer lifetime value (CLTV or CLV) is a metric that indicates how much value you’re gaining from your returning customers, on average.

One of the other most obvious customer retention strategies is to reward shoppers for their loyalty, such as through a loyalty program. According to customer data collected by ecommerce analytics platform Metrilo, the average repeat purchase rate across industries is 28.2%. Expect lower repeat purchase rates in industries with a lot of seasonality and higher rates for regular-use items like pet products or health supplements. According to NG Data, customer retention is faster and, on average, costs up to seven times less than customer acquisition.

You determine this number by dividing your gross annual sales by the total number of unique customers in that year. Once you have a recording system, you’ll need to add together every customer’s average purchase rate. For example, if a customer buys from you today, then buys another product a week from now, their purchase rate would be seven days. If they bought from you again two weeks later, then their average purchase rate would be 10.5 days. While a high NPS does not guarantee growth and retention, identifying and incentivizing brand evangelists can help drive referral business. This can work exceptionally well alongside content marketing initiatives such as the creation of case studies, website testimonials, and other forms of social proof.

improve customer retention rate

Basically, the longer a customer stays with you, the more money they’ve spent on your subscriptions and products. Keep in mind you don’t need to charge a fee for subscriptions, and many businesses offer tiered subscriptions that begin with a free, limited version. “Freemium” plans allow customers to dip their toes in while your business puts other retention strategies in motion. CRM platforms like Salesforce and HubSpot can help you track and compile information about your customers at every step of the customer journey. Personalization is one of the cornerstones of successful customer retention. One of the essential factors in any relationship is maintaining contact and listening to your partner.

Conversely, easy access to customer support reflects well on your business. Having no customer profiles also leaves your CX team in the lurch, without enough data points to meet customers’ needs or expectations during a service interaction. For example, if a customer calls your help line with a problem, your follow-up should mention their specific issue and the solution your agent offered. Adding customer retention solutions additional resources to your follow-ups, like links to relevant pages in your knowledge base, are another great touch. These small bits of personalization show customers that you care about their experience and that they can expect high quality service every time they have an issue. When the same person buys from you multiple times (pushing up your purchase frequency score), it’s a good sign.

  • For reference, Buffer has a monthly customer churn rate of around 5% and ConvertKit around 4%.
  • After all, if you start with 10 customers, lose two, but then gain four, that doesn’t mean you have a 120-percent retention rate.
  • CSAT surveys usually contain a simple 5-point scale or binary happy face/sad face option and are sent after a customer has received a product or used a service.
  • “Freemium” plans allow customers to dip their toes in while your business puts other retention strategies in motion.

This will vary depending on your scale, industry, or previous performance in the market. When she’s not tracking the impact of automation on the retail industry or the latest in digital privacy laws, she’s cheering on the Indianapolis Colts while planning her next international adventure. Information such as age, income, gender and lifestyle could be crucial to marketing more accurately to those most likely to buy from your company more than once. The successful failure of “New Coke” remains a talking point decades later. Instead, its attempted flavor change led to massive backlash, followed by appeals not to change the beloved recipe.

Once you understand how well or poorly your company retains customers, you can work to improve your customer retention rate. It is the percentage of revenue the company has lost from the existing customers in a specific time period. It can be a result of a cancelled order, a plan downgrade or the end of a business relationship. The first step for any business that wants to improve customer retention, slow customer churn, and reduce customer acquisition costs?

improve customer retention rate

Customers are more willing to wait if they know you are actively working towards a solution. Studies show that efforts to retain customers are more profitable and less expensive than when companies solely focus on bringing in new customers. If customers know that they can count on you to treat them fairly beyond the sale, rather than disregarding them after receiving their money, they will trust you with future purchases.

Leave a Reply

Your email address will not be published. Required fields are marked *

19 − 9 =