Companies with high-quality products, top-notch service, and personalized user experiences don’t just attract new clients, they retain their existing clients. Most loyal clients don’t just buy one product or use a company’s service once, they will come back time and time again. As a result, client retention increases the lifetime benefit of a company and increases profits.
How Retention Supports a Company
A company whose clients regularly buy high-priced goods would have the highest client lifetime value (CLV). These are the types of companies that have a solid retention policy and benefit most from it. Attracting a new customer costs almost five times as much as keeping an existing one. Many times, it costs up to 30 times more to gain a new customer vs. retaining an existing customer. Increasing customer retention rates by just 5% increases profits by 25% to 95%.
Client Retention Benefits
It is not possible to ignore the value of client retention. Although many brands concentrate on client acquisition, today no one should neglect the importance of retaining existing clients.
1. Client Retention Builds Advocacy
Brand advocates often contribute to improved CLV, a larger brand community, greater brand engagement, and cost-effective customer acquisition. Client advocates help promote a company’s name and their positive experience with the product, service, and employees. Not only do these customer advocate by word of mouth recommendations, many also advocate via social media directly influence a wider range of purchasing decisions.
2. Loyal Clients Increase Profit
Loyal customers encourage repeat purchase and also refer your business to their family and friends thereby increasing revenue. Higher retention of existing clients can also reduce marketing costs. Loyal clients resist going anywhere else, would keep coming back and understand your business and its value completely.
3. Retention of Clients Improves AOV.
Retaining existing clients is not only much more cost-effective; data reveals that loyal clients are 23% percent more likely to invest with a specific company than the average client.
Strategies to improve client retention
Here’s how you can maximize client retention:
1. Personalization is Key
According to Salesforce, “In exchange for analyzed interactions in which clients are immediately engaged and understood, 79% are willing to share relevant information about themselves.” This aids brands in developing a strong personalization throughout the customer journey. The more personalized the product experience, the more likely a user is to continue to engage with your brand –leading to increased profits.
2. Build Client Loyalty Programs
To build a loyalty program that stands out is a game-changing opportunity for businesses. Loyalty programs are tested and reliable methods for maintaining clients. It helps you promote customized relationships with your clients, and take care of their repurchasing inclination. By offering exclusive privileges to loyal clients who are repeat customers and tend to spend more, loyalty programs also help increase AOV.
3. Take Feedback Through Client Surveys
Surveying current clients is a great way to learn more about their perception of your brand. They are a strong starting point in understanding what needs to be improved with the overall customer experience. Customers appreciate it when a company asks for their opinion. It shows them your company values their opinion and is willing to take their feedback into consideration.
4. Consistent, Rich Experience for Clients
To start, many of you may ask: how do you do that? By mapping out your customer journey and developing a customer persona, you are able to better understand your customers and cater to their needs, as well as how to best market to them.
5. Corporate Social Responsibility Programs
Beyond products and services, it’s important to connect emotionally with your clients. Think about their core beliefs and develop a corporate social responsibility program (CSR) that pursues a charitable purpose. Being engaged with your clients, and demonstrating you know what is important to them, is a great way to prove you understand them.