How have your customer retention strategies been performing?
If you are not satisfied with the results, the good news is that it is always possible to qualify your actions.
But do you really understand what customer retention is?
A tip: many people confuse it with loyalty.
It is true that they are very close concepts, with similar approaches and objectives, but there are good differences between them.
Whatever your drama at the moment to retain customers, make sure you are in the right article.
We will explain the strategy, talk about its benefits and bring you step by step with all the customer retention actions that are decisive for your success.
So, you want to know what to do to retain customers? Be sure to follow this text to the end.
Good reading!
What is customer retention?
Customer retention is a strategy aimed at maintaining the consumer’s link with a company.
It is a concept best applied to subscription services, such as SaaS (software as a service), telephony, pay TV, newspapers, magazines and premium applications, although it can also be used by businesses of another profile.
In the aforementioned cases, there is an entire effort by the company to not lose subscribers, that is, to remain linked to it, interested in what it offers.
Banks are another cool example of understanding customer retention.
After all, even if you don’t pay a monthly subscription for your services, you can have products purchased in addition to your bank account, as is the case with investments and credit cards.
They can all be canceled at any time, right? That is why these financial institutions need a good strategy to retain customers.
Just as it is said about loyalty, it is much cheaper for the company to maintain the link, ensuring that the customer remains using its services, than prospecting new ones.
And speaking of loyalty, we opened this text saying that it is not the same as customer retention. Do you know why?
Loyalty does not necessarily imply the recurrent consumption of your solutions, but it does mean winning over the customer so that he will buy from you again whenever a new demand arises.
In addition, he not only uses what you offer, he trusts and recommends it to his friends, family and colleagues.
Realize, therefore, that customer retention is part of the scope of loyalty.
In the case of subscription services, the first will take care of maintaining the bond, while the second will try to win your heart and your mind, so that the consumption relationship becomes love.
The benefits of customer retention
A well-executed customer retention strategy offers a wide range of benefits for the company.
In order for you to better understand the importance of investing in it, we have selected the top five.
Check out!
(1. Positive marketing
The famous word of mouth advertising has great value, especially with so many people using social media to investigate the reputation of companies and the quality of their services.
But it only happens when, in addition to being linked to the company, customers are fully satisfied with what they have hired.
When this happens, they go from being mere consumers to promoting the brand, even if involuntarily contributing to positive marketing , which helps in gaining new customers.
(2. Most economical strategy
Every new customer demands a larger investment, starting with marketing actions.
Depending on your business model, passing through the sales funnel steps also occurs more slowly, requiring great effort to convince that consumer until he is ready to subscribe to a service or buy a product.
In the end, it is clear that you cannot abandon a customer prospecting strategy , but it is undeniable that maintaining them becomes much cheaper.
Without retention, you run the risk of losing that customer and then having all the trouble to win him back.
(3. Increase in sales and billing
Customers who already do business with a company are more likely to buy from it again.
There are statistics that show that, in some businesses, they are responsible for more than 60% of the sales made.
In a recurring service company, a good strategy for selling more is upsell . It is nothing more than convincing the customer to exchange their basic subscription for a premium one, adding value to the solutions they hire and raising their average ticket.
Not to mention that, if there is quality in the offer and support, the renewal of the contract is almost automatic, since there is satisfaction and interest from the consumer in its maintenance.
(4. Most satisfied team
Reflect on what we have just highlighted: customer retention gives less work to the sales team and, based on the upsell strategy, it still results in bigger commissions for them.
What is the result of this combination of good results and higher remuneration? Yes, customer satisfaction extends to your employees.
This is a very important factor for retaining talent in the company and reducing turnover rates.
(5. Evolution of the offer from the customer
As good as your results are, you can never let your guard down.
In this sense, retained customers make a very important contribution.
In addition to making it easier to identify the actions that work with them, the feedback received is useful to qualify your strategy and thus be better prepared to attract new consumers.
This particularity requires the manager to design a system of evaluations and collection of suggestions precisely in order to qualify the offer.
8 strategies on how to retain customers in your business
Now that the concept of customer retention is clearer and that you know its main benefits, it’s time to take action.
See eight strategies that cannot be left out of your planning when the goal is to keep consumers connected to your company .
(1. Prioritize service excellence
There is no doubt that the provision of a quality service is essential to guarantee customer retention and loyalty.
But especially in subscription services, part of this quality is related to the service and support offered.
This implies being prepared both to put out fires (when something the customer doesn’t like) and to be proactive (working on an after-sales strategy ).
There is a concept that you need to know, which is called customer success .
Described by Lincoln Murphy , customer success understands that the customer’s success in consuming is reflected in the entrepreneur’s achievement with the sale.
It requires the development of a very clear strategy, which starts at the top of the sales funnel and only gets stronger as the customer continues on his journey.
Understand that excellent service depends on ensuring that the consumer makes the best possible use of what he has hired, effectively experiencing the advantages promised to him in the sale.
(2. Know your real customer
Who is the customer you hope to retain?
If you don’t know how to answer or don’t have complete information about it, you need to qualify the strategy.
In order to know the customer, it is essential to have CRM software , a solution that automates the management of your portfolio, going far beyond a mere registration.
With the help of technology, you can reach an advanced level of personalization in service.
After all, you know what he likes and how he behaves when consuming , which allows you to access him in the right way, through the preferred channel, at the best time for that, with the offer tailored to your wishes.
Although this requires a lot of effort, it is still far below what it would have to lose that customer for not really knowing him, having to get him back in the competition.
You can’t give that mole, can you?
(3. Understand your customer’s needs
There is no secret about the importance of this strategy, as we have just talked about a similar action.
The truth is that the more you know your customer, the better you understand what he wants and, thus, the more qualified he becomes to supply your needs.
Without doing this homework, you run the risk of approaching the consumer like a mechanized contact, in which he is just another one and does not feel special.
Not to mention the work you can do to try to retain a customer whose intentions you are unaware of.
Believe me: gathering as much information about him makes his task much less inglorious, as it allows him to focus on what really interests him and even anticipate possible objections, which are the reasons he presents for not renewing an offer, for example.
(4. Value your brand
It is not because a consumer is part of your customer base that you will fail to reinforce your strengths, just as you did in the acquisition process.
A lasting relationship requires permanently demonstrating the qualities that have won the other party.
Just like in love, you need to give him reasons to fall in love with you daily.
If you are dedicated to taking care of only new subscribers, you end up hurting the old ones. Makes sense, doesn’t it?
So, try to develop actions that make the link with your company worthwhile.
Offer advantages, bonuses or small treats that show your concern for that customer and help them maintain a positive image about you.
Make sure your customer base is the first to know about the news, which can be accomplished by sending a newsletter .
Pay attention to it, make yourself present and show the benefits you have been getting by staying true to your offer.
Always keep an open channel of communication with that customer, whether to listen, to speak and to reinforce your differentials, the most valuable points of the brand that justify maintaining the link.
(5. Watch out for loyalty programs
One of the strategies that usually work well to provoke the customer to perceive the advantage of being a subscriber is in the loyalty programs.
It just needs to be the result of a very well planned action, or the shot backfires.
You have probably found yourself unhappy with some kind of initiative.
Perhaps it was due to the existence of rules that are not so clear or the lack of a relevant offer that benefits you.
Not to mention the difficulties in registering and redeeming benefits.
This is the risk of trying to offer something in exchange for customer loyalty.
In the end, there is always the chance that the consumer will feel cheated or perceive that he or she is part of a strategy whose goal is not their satisfaction, but to collect their data for future actions.
So, be careful.
Learn from the mistakes of others so that your loyalty program is tailor-made, ensuring customer satisfaction and retention.
(6. Solve your customers’ problems as quickly as possible
Solve your customers’ problems as quickly as possible
Remember what we said earlier about quality support?
There are two good reasons for you to act quickly and effectively.
The first of these is in the customer’s own satisfaction, who perceives greater value in what you do when you are well attended and demand is promptly resolved.
The second is preventive. After all, the longer it takes to act, the more contours the crisis will win.
Think about what can happen if an unhappy customer makes an outburst on social media, even if you are not entirely right in your arguments.
Fixing a scratched image takes work. So, don’t hesitate.
The best thing is to have a strategy ready to act in these cases and turn a crisis into an opportunity.
(7. Organize around the customer, not the company
The focus of your actions must be on the customer.
After all, as already mentioned, his success will also be reflected in his results.
You may have carried out a detailed strategic planning , with a sequence of carefully elaborated actions. However, in practice, realizing that it is not working as it should.
What are you going to do in that case? Trying to impose your proposal or adjust it according to what the customer asks for, perhaps making changes to the offer and service?
If you don’t take this second path, the risk of not being successful in retention is real.
It doesn’t hurt to repeat: the customer needs to feel valued, which is why your company exists.
(8. Track crucial metrics
Do you have the habit of adopting metrics in your business?
As the name suggests, they are measuring instruments that offer relevant information to understand the results and, in addition, to carry out business decision making.
We could list dozens of metrics with good potential to help you with your challenges.
But ideally, you should do a study to see which ones are best suited to your reality.
In the case of subscription services, one of the main ones is the churn rate, which is nothing more than the cancellation fee.
If you’ve been losing customers more than you should, it seems clear that your service needs to evolve so that the sales team is more efficient.
We have an article about it, which you can follow here .
Another very nice metric for your business model is the Lifetime Value (LTV), which answers how much the customer will generate in revenue for the company throughout its relationship with it.
Along with LTV, also apply the Cost of Customer Acquisition (CAC), a metric that answers how much you need to invest on average to win over each consumer.
If the CAC is very close or even higher than the LTV, that means only one thing: loss.
So, it’s time to review your strategy, do you agree?
Conclusion
In this article we saw tips and information for you to build a customer retention strategy.
Although this is a concept very much related to subscription services, with recurring usage and collection, it is worth considering what you have followed along the reading for whatever business model.
The main lesson that remains is the need to focus your actions on the customer.
It seems obvious to say that, but sometimes our planning is not built to work, but for the client to accept it as it is.
If so, it rarely works, at least not without making the adjustments that reality shows are necessary.
Take advantage of what you have learnt here today to optimize your actions, continue to delight your customers and keep them loyal to your brand and company.
