What is customer retention and 9 strategies to improve yours

Many companies dedicate a large part of their time and resources to attracting new customers. But, did you know that ensuring the retention of current consumers is even more profitable for your business?

Retention not only guarantees recurring income for your company , it also reduces costs and generates new brand ambassadors.

To ensure this success, the commercial operation must be aware of the importance of repeat consumers and work with a focus on the consumer experience .

Therefore, we prepared this article to talk about what customer retention is and how to improve your strategies to build customer loyalty.

What is customer retention?

Customer retention is a set of practices and strategies focused on ensuring that a consumer’s bond with a company is continuous.

This concept is widely used in services and SaaS ( Software as a Service ) companies, such as Netflix and Spotify, which are monthly subscription services.This is because it is not interesting for people to use these services for one or two months and cancel their subscriptions. The longer a customer stays, the better.

This is why these companies implement various retention strategies like “subscribe to a quarterly package and receive X% discount”.

Building loyalty and retaining customers is also important to ensure that new consumers get to know your company through recommendations from those who are already part of your portfolio.

To do this, you must constantly win over these people, working to ensure they have the best experience possible.

Key Benefits of Customer Retention

The benefits of creating good customer retention strategies in your company are diverse. With that in mind, we’ve separated the most important ones for you. Check out:

Positive marketing

Positive Marketing can be defined as the popular “word of mouth”. It happens when customers feel completely satisfied with the products and services received and recommend the company to other people.

They stop being just customers and become ambassadors (or promoters) of the brand. With this, they promote positive marketing, helping to attract more people to the business.

This concept is gaining more and more strength with the relevance of social networks in the business world. Since they provide platforms for people to express their opinions about companies.

On the other hand, if you don’t work to fully satisfy your consumers, this factor could work against you.

Instead of receiving recommendations, you end up receiving criticism and harming your prospecting for new customers.

Cost reduction

Acquiring a client from scratch usually requires more team resources than maintaining existing ones. Therefore, customer retention reduces business operation costs.

A new business needs to go through the stages of the sales funnel and may require a lot of work to convince the consumer that your solution is ideal for them.

Your customers, on the other hand, have already gone through this process, which requires fewer strategies and resources to keep them in your portfolio.

Increase in sales and revenue

Retaining customers increases your sales and revenue.

You are dealing with a consumer who already knows the company, which requires less persuasion and resources to close the deal once again.

Consequently, this reinforces your sales, as new businesses continue to appear and boost your revenue.

This benefit works especially well in cases of companies that still do little work on customer retention and start to apply strategies more assertively.

Sales team satisfaction

If customer retention reduces the sales team’s work to generate sales, it is natural for them to feel more satisfied.

Furthermore, there is the possibility of receiving better commissions with upselling , a strategy that consists of offering more complete packages to customers who have already purchased a solution.

Optimization of commercial operations

By retaining customers in your company for longer, you can observe the strategies that work best to increase satisfaction with your services.

This allows you to optimize your commercial operation based on the feedback obtained from them, adjusting or discontinuing practices that do not work the way you want.

And so, your job of attracting new consumers is also made easier, as you can qualify your offer based on the experiences reported by your customers.

The 9 best strategies to retain your customers

Now that the concept of customer retention is clear and you know the main benefits of the practice, let’s look at the best strategies for having repeat business in your company. Check out:

1 – Offer excellent service

Customer Success is essential to retaining them.

To promote this satisfaction in your consumers, offer excellent support throughout your after-sales service .

Therefore, your service team needs to work intelligently to prevent problems.

Prioritize Customer Success and ensure that your consumers use your solutions in the best way possible. Therefore, it is natural that they want to stay with your company and make new sales.

2 – Adapt to the customer

You need to seek constant improvements to improve your service and improve your products and services.

To do this, you need to think about the client’s point of view when structuring your strategies, which can generate some internal resistance.

Therefore, use relevant data to demonstrate the results that can be achieved in the long term with the proposed strategies.

3 – Know your consumer’s needs

The better you know your customer, the greater your understanding of what they need. You need to make your consumer feel special, unique, and not just another person.

By understanding the customer’s pain points and objectives, it is possible to improve the approach and offer excellent service.

It’s easier to retain customers if you know their intentions, which is why you should gather as much information about them as you can.

Furthermore, knowing your portfolio allows you to anticipate objections and methods to reverse situations in which consumers do not want to renew services.

4 – Create service channels

Creating efficient channels to serve your customers is of great help in improving Customer Success .

Consumers need to know they have recourse if they have questions or problems.

In addition to monitoring them to ensure that everything happens properly, these means of contact bring your relationship with customers closer and generate stronger relationships.

5 – Value your brand

Reinforce your strengths frequently. Although the customer has already purchased a product or contracted a service because they view the company positively, there is value in remembering the reasons why they made this purchase.

By focusing efforts on delighting only new customers, the tendency is for current customers to feel neglected and want to try other solutions.

Therefore, offer unique benefits and constantly update your customer about news.

6 – Be careful with loyalty programs

Loyalty programs can work well to retain your customers. Through them, you can highlight the advantages of your solutions and keep your base happy.

However, be very careful when designing this type of program. If it is not well thought out, it can have the opposite effect of what you want and drive away the consumer.

Many loyalty programs make the mistake of not worrying about the customer, but rather collecting information.

Create clear rules and make it easier to redeem benefits, providing a truly valuable offer in exchange for customer loyalty.

7 – Solve your customer’s problems quickly

We have already mentioned the importance of offering quality support. Part of this is being able to resolve issues as quickly as possible.

This is an effective way to increase customer retention, who see the value of having a problem resolved quickly and quickly.

In cases where support takes a long time to arrive, the effect is the opposite: instead of retaining, it generates dissatisfaction.

Therefore, work on preventing these potential noises and take the opportunity to reinforce your image in a positive way by solving these problems promptly.

8 – Determine and track your KPIs

Key performance indicators ( KPIs) are fundamental to determining the effectiveness of your actions.

Carry out a detailed study of your business to understand which metrics make the most sense and determine achievable results.

Good examples of KPIs that contribute to your customer retention are:

  • Churn Rate: Churn Rate is your company’s cancellation rate. The lower your churn, the better your customer retention;
  • Customer Acquisition Cost (CAC): Customer Acquisition Cost is the average value that each consumer costs your business;
  • Lifetime Value (LTV): Lifetime Value determines the income that each customer should generate for your company during the relationship.

9 – Have a content production strategy

Apply strategies to build authority for your brand in the market. Create valuable content and share your knowledge with the public.

Use optimization strategies for these materials (such as SEO and SEM ) and show that you know what you are talking about.

Take the opportunity to nourish your customers with interesting materials that speak to their needs, awakening the desire to continue purchasing from you.

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