A business can't grow without a steady stream of leads, but the same is true if it loses more customers than it gains.
The difference in spend between lead generation and customer retention is astounding: 80% of businesses spend over 70% of their marketing budget on lead generation. That means less than 30% of budgets go to customer retention and re-engagement, including upselling and cross-selling.
A bit more on long-term customer loyalty
Loyal customers don't just spend more, they actually drive business growth for you.
- Increasing customer retention rates by 5% can increase profits by 25% to 95%, according to research by Frederick Reichheld of Bain & Company.
- Satisfied customers are 87% more likely to buy add-ons or extra services than dissatisfied ones.
- 60% of loyal customers promote your brand to friends and family.
- 39% of loyal consumers pay more for your product even when a cheaper alternative is available.
Tips for increasing customer retention
Give your customers a voice
Customers need to feel their voices are heard. Provide regular opportunities for them to give honest feedback so they feel they are in a partnership with real people, not a faceless logo.
Start the retention process from day one
The most important day of your relationship with your new customer is the first day. This is when you begin your customer retention tactics by having excellent communication and establishing expectations about what your contact with them will look and feel like.
Customers need to be able to use your product or service to its fullest capacity and know that you can provide what they need. If not, they’ll likely leave for a competitor.
Prioritise your customer support service
Every minute and hour a customer has to wait for a solution to a support request, the more likely they are they go to a competitor.
As a minimum you should:
- provide easy routes for customers to get in touch
- measure and continually improve the number of requests you resolve during the first call
- contact your customers to get feedback on your service, which also presents the opportunity to find out about their current needs and upsell or cross-sell other services or products to satisfied customers
Generating loyal, satisfied customers almost entirely boils down to one common element: the customer experience. How do you deliver a great customer experience?