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5 WAYS YOU CAN GROW CUSTOMER RETENTION TO BOOST PROFITS

06/02/2019

While it can be tempting to put all your resources into chasing new business, it can be more lucrative to improve your retention rate and build repeat custom. In this article, Andrew Dark, Director and Co-Owner of promotional product specialists Custom Planet, discusses how you can accomplish this.

 

Is the majority of your business’s marketing budget focused on targeting new customers? If yes, then you might want to think twice about this type of approach. In actual fact, putting the onus on retaining your current customers can benefit your company more than winning new business: research has found that by boosting retention rates by just 5%, you can increase profits by more than 25% (Bain).

 

But, while it’s easy to say “okay, let’s retain our clients”, it’s important to remember that this isn’t always as easy as it sound. There are usually always ways that you can improve your products and services that will help to lower customer churn and maximise profits. To help you out, I’ve listed a few ways that you can build customer retention for your business.

 

Know your customer base inside out

Before you can make the necessary changes to improve customer retention, you need to know your clientele inside out, finding out what they want and identifying reasons that they might be swapping to another brand. Armed with this information, you can make the right decisions for your business in order to win over people who may have been one-time customers previously.

 

One of the best ways to compile, access, and analyse this type of data is through a good customer relationship management (CRM) system, which should help you identify the key trends in your client behaviour. This should include information on purchase patterns, product usage, and customer service interactions that will help you spot the warning signals for when they’re about to churn.

 

Make customer experience your number one priority

When it comes to pin-pointing the aspects of your company to focus on to keep people coming back, the customer experience is the top seller. According to stats from Verint, 34% of the time, buyers switched brands due to a poor customer experience, which was more common than people swapping for a better price (31%). Therefore, you should look to prioritise this in your operation.

 

There are a number of ways you can improve your customer experience. If you think you already deliver a pretty good service to your clientele, you should take the time to really consider their feedback and make sure you address any points of concern fully, as well as highlighting what you do well and trying to find ways to extend it across your brand. If you believe you need an overhaul from top to bottom, think carefully about the ideal experience you’d like to provide, then work backwards to meticulously plan how you’re going to deliver.

 

Give your customers something to love about your brand

In addition to providing a fantastic customer experience, a great way of building customer retention is to give your clients something to love about your brand. If you have a few USPs that really sell your company to an audience, they’ll be more willing to stay loyal for the long-term. And, when you make customers care about your business, you’re more likely to benefit from word of mouth marketing as people share their passion for your goods and services.

 

A great example of this can be found in the global trend towards supporting brands that follow an ethical ethos. In 2018, 49% of the UK population said they have chosen not to buy a particular product or shop with a certain company due to concerns about their practices (Ethical Consumer). So, if you were to capture the public’s passion for this movement with your brand, you could potentially capture a larger market share that would stick with you as long as you continued to offer them an option for ethical products and services.

 

Reward your most loyal clients

Another great way of keeping your existing customers onside and open to repeat business is to reward loyalty. By offering discounts and incentives, you’re showing that your brand really appreciates its customers, and, in turn, they will be much more likely to reciprocate by sticking with your company when they next make a buying decision.

 

If you can’t quite afford to offer rewards across your whole customer base, then it can still be useful to identify a smaller group of profitable clients and ensure they get that VIP treatment. This way, you’ll be able to build up a highly valuable relationship with the customers that will provide the biggest payoff with repeat business.

 

Utilise corporate gifts to create brand awareness

Similar to offering rewards for loyalty, you can also make use of corporate gifting to show that your company cares and to build positive relationships with your most valued clients. In addition, if you add your logo and name to your gifts, it’s possible to build brand awareness that will always keep your company at the forefront of your clients’ mind for repeat business.

 

These promotional gifts don’t even need to be high value to have the desired impact. If you consider your client’s needs and choose a useful product that’s used all the time, you may be able to secure extended exposure for your company. For instance, a customer who works in an office environment is much more likely to appreciate useful stationery items, and if they’re using them every day, they’ll also be seeing your logo and name, too.

 

Take my five ideas on board and you will be able to maximise your potential for customer retention for increased profits.

 

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Finance Derivative is a global financial and business analysis magazine, published by FM.Publishing. It is a yearly print and online magazine providing broad coverage and analysis of the financial industry, international business and the global economy.