Given these four noteworthy sightings, one can basically deduce that customer retention is indeed an noteworthy factor to strengthen on in growing the profitability of the business. But the suspect that stays is what can you do to enhance your customer retention rate?
The counter is to generate your existing customers happy. Below are three strategies you can task on in enhancing both retention rate and paying for frequency of your existing clients.
These existing customers are already doing finance with you. And investing on them are more probable to payoff than spending your resources in earning novel clients. Thus, it is but rational to spend more resources on these assembly since they prevailing a higher ROI.
Investing more time, action, and resources on your existing customers will also give your finance a ?market sanctuary?, or a assembly of loyal customers that can deliver regular sales that can assist uphold your business in severe times.
A phone call or a condensed email every now and afterward will go a prolonged way in bolstering your existing relationship with your seal clients. These basic gestures will suggest your customers that you worth them, and they are not just mere diagrams across your economic statement.
It is also noteworthy to message that communication is a two-way thing. Thus, it is needed to listen to your customers because it is never come seal you and it is regularly come seal them. And listening doesn't just midpoint perceiving your customers' fears, but presently doing something come seal them. This doesn't midpoint that you have to funding all of your clients' wishes even how silly they are. Saying ?no? to a ask for and delineating the intent why it is not possible, if done correctly, is an motion that can demonstrate your honesty to your customers.
What you want is to be prioritized by your customers, and the best way to achieve this is to demonstrate that you are prioritizing them as well. And this can be realised by safeguarding a regular and free-spoken communication channel between you and your seal customers.
Fact # 1: 80% of a company's revenue comes from 20% of its customers.
The 80-20 rule which is more commonly known as the Pareto principle has been the rule of thumb in business. As most companies get 80% of their sales from 20% of their clients, one must agree that the 2 most important goals in customer retention is to first foster the customers belonging in the 20% and, second, is to improve the relationship and purchasing frequency and volume of the other 80%.
With such a small percentage of the total customers actually providing the bulk of the revenue, and losing a single client from that crucial 20% will have a great impact on profit, the number of companies prioritizing customer retention is now rapidly growing. And establishing the sought after ?customer loyalty? is not easily accomplished especially if you consider fact # 2.
Fact # 2: On average, a company experiences a 25% customer attrition rate per year.
Every year, there is a high possibility that ? of your clients will leave you. The top reasons why customers abandon a product or service are the following:
No longer buying the category of your product / service Unhappy with the price of the product or the quality of service Not satisfied with the product / service Unhappy with how they are being treated
Measuring the satisfaction of your customers based on these 4 factors is crucial in maintaining a long and profitable relationship between you and your customers. And the importance of taking care of your clients is doubled when you include fact # 3 in the equation.
Fact # 3: It costs 6-7 times more to acquire a new customer than to keep an existing one.
For every dollar you spend in making an existing customer happy, you need to spend $6 more in order to get a new customer. The big difference in the cost of customer acquisition to retention gives more pressure to companies in increasing their spending budgets on customer retention programs. This investment is worth every penny especially once you take into account fact # 4.