It is well known that retaining a customer is helpful as compared to acquiring a new customer. Customer churn scares SaaS founders the most and there are multiple ways to beat it. It is much cheaper to maintain existing customers as compared to acquiring new ones. Once customers become loyal, they will be more attached to the product or service. Customer churn makes revenue go and this is why it is important to plug holes. Keeping track of SaaS retention metrics is supremely important to win at retention.
If you are not retaining your customers, chances of overall loss are more. The longer you retain your customer, the more the chances of customer lifetime value (LTV). Customer lifetime value will impact your revenue, impact investors, and more. It is important to retain customers as the ROI will be higher.
What is customer retention?
Customer retention is the ability of a company to retain its customers for a specified period of time. Higher customer retention means that customers will stick with the business and continue to be associated in some way or the other. Through brand loyalty initiatives, customers can be retained.
Why is customer retention important?
Customer retention matters as it helps you know how satisfied customers are. You can also know of any red flags in the business which will turn off customers. Customer retention will give you dividends in the long run-
· Increased AOV
It is also proven that loyal customers will spend more on the company than others. With time, they will increase their average spending and improve balance.
· Lower costs
More than 80 percent of companies feel that customer retention is cheaper than customer acquisition. More companies spend on acquisition instead of nurturing existing base.
· Improved brand loyalty
When your customers are retained, they become loyal. They can become brand ambassadors. 60 percent of customers talk about their favourite brands to their friends and family.
· Increased profits
By keeping your customers happy, there will be an increase in profits too. By increasing customer retention up to 5 percent, a company can increase profits between 25 percent to 95 percent.
How to calculate customer retention rate
Customer retention rate is the percentage of customers that the company has retained over time. To calculate CRR, the number of new customers must be subtracted from the number at the end of the period.
CRR= (Customers at the end of period- New customers during the period)/ Total customers in the beginning x 100
7 Customer Retention Strategies that Work
Retaining customers is less costly as compared to acquiring them. To grow your revenue, you need to keep the customers you have already.
Stand for something
More than 60 percent of customers feel that a brand feels shared values as the important reason for a relationship. Customers will ignore you if your brand doesn’t embody what they feel. It is necessary to create a good connection with them based on emotions and values. Knowing the values and beliefs as a strong part is necessary.
Get feedback through surveys
Getting feedback from clients through customer surveys is important. To understand the overall online experience, knowing what customers think is important. Customers like giving their opinion and look forward to that extra mile of support and special treatment.
Educate your customers
Providing information to customers about the product will help them stay retained with the product. If customers are aware, chances of them staying with the brand are more. Offering resources that make it easy for customers to use the product is crucial. One on one training sessions, tips and tutorials will help get customers started.
Communicate with your customers
Constant communication with communication will improve customer retention. There are nearly 4 billion email users worldwide and it is the most popular mode for communication. It is important to be consistent to improve personalisation. Social media is also an effective tool to keep in touch with customers.
The success of a brand depends on the level of unique personalisation for the customer. Nearly 80 percent of customers will share relevant information in exchange for contextualised interactions or personalised information. Recommending products to customer based on behaviour will also add personalization.
Offer easy returns
To stand out and manage competition, it is necessary to retain customers. There will be cases where a customer wants to replace or return a product. When the process is simple, customers will come back to the ecommerce store happily. With easy returns, it is possible to keep the customer. With easy returns, customers feel satisfied to be connected with the brand.
Provide great customer service
Many companies believe that customer service is only based on going overboard. Loyalty is cultivated over time. Focus on meeting expectations of the customer and delighting them at every step. Provide support at the right time and channels. Live chat is critical when customer sites go down. Customer support is necessary to improve efficiency.
Bottom Line: A balancing act to retain customers
There are no shortcuts to retain customers. There is a need to get a business relationship in place. There is a need to not over-deliver on promises. Customer expectations are high and the only way to win is to be competitive. There is a need to create the best shopping experience to keep customers from churning. These strategies will help give you an idea of what’s best for customers. With good customer success software, you can streamline all activities of the company. You can also manage customer engagement and more to get a true idea of the benefits of the customers. Keeping track of their pulse is important to predict the right products for upselling or cross-selling. Customer retention strategies are not a one-time thing. It is a contracted effort of multiple stakeholders to give the customers who trust them the best. The more customers you retain, the higher are the profits for retention and satisfaction. Keeping customers engaged and happy in the relationship is important to keep them retained.