As per a survey, “80% of a company’s future revenue would come from 20% of its existing customers“. This vital customer retention statistics highlights the significance of implementing customer retention strategies for businesses.
Besides boosting your business revenue, customer retention really helps to enhance your customer’s lifetime value in the longer run, which makes deploying customer retention solutions and strategies a must for your business.
In this blog post, we will explore why you should consider customer retention as your core business strategy and how optimally-designed customer loyalty programs facilitate augmented customer retention.
So, why should you actually consider customer retention as your core business strategy? The answer to this lies in the long list of benefits and competitive advantage customer retention brings for your business. Let’s take a look at the 5 most prominent reasons to make customer retention your core business strategy –
Customers indeed are the greatest assets of a company as without them the organization cannot exist. Devoid of a strong relationship with your customers, you cannot expect to realize your set business objectives of growth and expansion. Positive relationships maintained via constant engagement with existing customers forms the base of your business success – though there are several monetary gains you get by maintaining cordial relation with customers.
According to Bain and Co. “The cost of acquiring a new customer can be 6 to 7 times more compared to that of retaining an existing customer”.
Retaining customers is indeed less expensive than acquiring new ones. Evidently, the extra marketing efforts for luring in a new customer require more spending compared to convincing the existing ones.
Even if you attain new customer acquisition somehow at a low cost, bringing a newly acquired customer to exactly the same profitability level as an old one would come out to be 16 times more expensive.
Sounds astonishing? Having a customer retention strategy in place can help you save such extra expenditures though.
Do you know “66% of US customers have a greater spending on brands which they have used before”.
It clearly indicates that a satisfied customer who has already invested in buying your products or services is more likely to agree to your new offer.
As per a Nielsen survey “Compared to new leads, your existing customers spend 31% more and so they are 50% more likely to take your new offering”.
As per Marketing Metrics survey “There exists a 60-70% probability of making a sale to your existing customer, while that of selling to a new customer is only 5-20%”.
This crucial statistics highlights how customer retention can enable your business to amplify sales through the favorable purchasing behaviors of your existing customers.
As per a recent survey “55% of US customers recommend brands which they trust to their friends and family. Moreover, 12% will even defend a brand on social media if they are loyal to it”.
Reinforcing a solid brand presence largely depends on how satisfied your existing customers are. So, when you go for retaining customers by strategically offering them enticing perks, you demonstrate how much you value them.
It brings a two-fold effect by not only delighting your existing customers but also spreading a positive word about your brand when the same delighted customers speak good about you on social media.
According to Gartner “80% of a company’s future revenue would come from 20% of its existing customers”.
So, your firm’s growth & revenue in future to a large extent would depend on how perfectly you execute your customer retention strategy. A lot would thus automatically depend on your relationship with your existing customers.
As per Bain and Co. “Businesses which boosted customer retention by mere 5% experienced increase in business profits ranging from 5% to a massive 95%”.
Even from the profitability perspective, customer retention holds the key and hence formulating the perfect customer retention strategy needs to be your priority.
These statistics are self-explanatory to make you realize why customer retention is vital to your business and should be included as your core strategy for continual business growth and distinguished brand presence.
As soon as you attain a conversion and your product or service is taken by the customer, you are in the perfect position to start building & implementing your customer retention strategy. It must be mentioned here that the best customer retention solutions & strategies primarily revolve around making the customer loyal to your brand. At the basic level, you necessarily need to account for following –
Enhance Customer Service Experience
Delivering great experiences and providing exceptional customer service should be your priority. You can consider expanding your customer support options and quickly responding to customer concerns for delivering a more satisfying customer experience.
Provide Reliable Advice to Customers
Consistently offering valuable educational content to your customers helps you gain the status of a trusted advisor than just any other vendor. Focus on delivering content that helps your customers to overcome their challenges and fix problems.
Request for Feedback and Work on It
Collecting customer feedback helps you gain insights into the way your customers think about your product. Rather than sending boring surveys, request your customers to provide feedback via email and then take action to implement changes.
Launch a Well-designed Loyalty Program
Launching your own loyalty program is a highly advantageous strategy that modern businesses are leveraging nowadays to retain customers. As strategic customer retention programs, loyalty programs indeed work wonders for the business as customers stay loyal to the brand when they feel valued.
From a layman’s perspective, customer retention refers to the process of engaging or influencing existing customers so that they continue buying your products or services, and that is where loyalty programs are extremely effective. Loyalty programs facilitate the process of maintaining your existing customers intact as you offer them lucrative perks, as part of the program, to keep them fully engaged and connected to your brand.
Implementing a loyalty program becomes a mutually profitable exchange for you and your customers – while you gain from their repeat business, your customers derive more value by buying more of your offered products/services.
If you do have a goal of establishing sustainable growth, boosting brand presence and long-term profitability for your business, having a well-planned customer loyalty program in place should be of paramount importance to you. Offering your existing customers a rewards based loyalty program that catches their interest is the perfect strategy to adopt if you aspire to boost customer retention rate and your brand image.
A customer loyalty program offers the optimal way to foster loyalty and boost customer retention. A well-executed loyalty program motivates your customers to make frequent purchases out of their willingness to earn “exciting rewards”.
Now, the “exciting rewards” part is where you need to focus the most while designing your loyalty program because no customer wants to be a part of a dull rewards program. It would thus require you to take expert assistance from the masters in the domain of loyalty program design & implementation.
If you require customer loyalty program experts to design and implement your loyalty program, then Annex Cloud experts can be of valuable assistance to you. With more than 10 years of experience in configuring and deploying customer loyalty solutions for businesses in diverse industry verticals, Annex Cloud should be your preferred technology partner for customer loyalty program creation and implementation.
Simply connect to our loyalty program experts to get the ideal loyalty program implemented for your specific business requirements. Call our experts now!