FinTech

Unlock Top Customer Retention Strategies for 2023

Customer retention is a measure of how many customers stay with your business for the long term. It’s what demonstrates your business’s ability to stimulate customers to make repeat purchases and spend more money on your products and services over time. When you increase customer retention, you don’t have to expend nearly as much revenue on marketing, sales, customer training (depending on the industry), and other customer acquisition costs. Plus, customers who stick around tend to be happy with your product or service, which makes them walking billboards for referrals. Customer retention refers to customers who deliberately pay for your products or services more than once over a period of time. A single loyal customer making several purchases over a year is ultimately more influential than several shoppers that buy once and never again.

customer retention

Pepper is a bra company that helps women find the right bra size for them. It does this by having customers take a 45-second fit quiz that results in a personalized recommendation based on that customer’s answers. Dia & Co is a clothing brand that specializes in creating clothes for plus-size women.

Customer lifetime value (CLV)

Create an online community for loyal customers to interact with each other and share their experiences. This can serve as an educational forum for customers to learn more about your products and gives you a direct line to their thoughts and problems. Increase https://www.xcritical.com/ by rewarding customers who are loyal to your company. By showing customers you appreciate their business, you provide them with yet another reason (besides your great product) to stick around.

  • Longtime customers are more willing to branch out and try other products from a company they trust and from sister companies.
  • With this in mind, it is important to remember that customers are people, not data.
  • You need to keep on trying and earn a customer’s loyalty, continuously.
  • Evaluating whether existing customers took offers with cross-selling and upsells is a significant part of expanding your company’s growth and revenue.
  • However, if you gather customer input without ever implementing changes, you might appear uncaring and thus lose customers.

This is the number of different customers that purchased from your store in a distinct time frame. This refers to the number of customers who have made more than one purchase in a specific period of time. But according to research from Dixon, Toman, and DeLisi published in The Effortless Experience, the true driver of customer retention and loyalty is the ease of getting a problem solved. However, there will be situations when customers want to return and replace the product.

Average order value

According to Harvard Business Review, onboarding a new customer is 5x to 25x more expensive than retaining a customer you already have. With just a 5% increase in retention rates, you can grow profits by 25 to 95%. And once you bring someone into your company’s ecosystem, the last thing you want to do is lose them. That’s why customer retention is an important key performance indicator (KPI) for all businesses to measure, improve, and build upon.

Maintaining customers and transitioning them into recurring customers is just as important of a process as gaining new ones. Customer feedback is one of the most valuable tools to increase customer retention and reduce churn rates. If you want to know what is and isn’t working for your customers, it helps to hear it straight from the horse’s mouth. Happy employees are generally more inclined to provide top-of-the-line support and form long-lasting relationships with clientele that improve customer retention.

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Follow up with them on a phone call or with a personalized email to understand how you can make their experience better. Clothing and shoe eCommerce site Zappos is well-known for its excellent customer service — including its efforts to show customers how much they care by saying thank you and sending gifts. To the point above, taking the time to say thank you to your customers — outside of an email campaign or a customer purchase — goes a long way toward building a brand that’s lovable and memorable. In fact, customers are more likely to trust opinions from family, friends, and other consumers more than branded content and ads.

customer retention

It shows you’re paying attention and that their testimony means something to you. When you offer customer service that is empathetic, easy to navigate and direct, it can go a very long way to helping you create a lasting, positive relationship with consumers. For instance, a customer https://www.xcritical.com/blog/customer-retention-for-brokers-8-tips-for-brokerage-firms/ hears from a friend who repeatedly buys from you that they are happy. Do not be afraid to ask your customers how you are doing, even if the answer is not as pleasant as you would hope. Even if positive feedback feels good, it is often the negative feedback that is more important.

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