Since customer acquisition is quite challenging and expensive for any business (especially small ones), it is essential to employ specific marketing strategies and tactics that keep customers coming back time and time again. In this article, we will discuss the advantages of customer retention and provide austria phone numberspractical advice using examples from well-known and smaller brands.
What is customer retention?
Businesses use customer retention as an indicator of customer loyalty over time. Companies employ various strategies to improve customer experience and increase customer retention over a specific time frame.
The formula for calculating customer retention rate is as follows: Total customers (CE) minus new customers acquired (CN) divided by the total number of customers acquired at the beginning of the period (CS).
You may wonder if investing in acquiring new customers is more effective than targeting resources to retain customers.
Both actions are equally important for business growth, and in an ideal world, salespeople and customer service specialists would work together to achieve both goals. After acquiring new customers, marketing and customer service specialists begin working with them. The customer service team troubleshoots issues, provides onboarding support, gathers feedback, and ensures they get the most out of their purchase. Marketing specialists work on re-engagement efforts, such as special offers, discounts, newsletters, and other customer retention strategies.
This way, people won’t be able to leave bad reviews or ask for a refund. If your customers are happy, they’ll continue to do business with you, give testimonials, refer you to their friends, and post good reviews about you on social media and independent review sites.
Allocate a budget for customer acquisition and retention activities. Remember that developing new customers is much more expensive. According to Forbes, it costs five times more to retain an existing one. This happens because new customers don't yet trust your business. It takes time and money to get their attention—and even more to convince them to buy from you.
Benefits of customer retention measures
Retaining customers takes both resources and time, but it’s worth it because there are many advantages to retaining customers. Long-term profitability can be increased, and your brand awareness among your target audience can increase.
Increasing average order value and repeat customer rate
Not following up with customers to upsell or cross-sell them to additional products or services is a standard mistake businesses make. These follow-up activities can increase average order value and improve repeat customer rates.
For example, a consumer contacts you to undergo a PSI (PageSpeed Insights) audit of their Magento store. Why not reach out to them after they're done to see if they want to place an order? How about Google Magento Page Speed Optimization or other related services?
Brand Advocate Training
Consumers develop loyalty to your products and services when they turn to a company frequently. First, they start spending more on your products, increasing your customer's lifetime value. Then, they refer your company to their friends, family, and acquaintances, expanding your customer base.
