As the saying goes, it can take months to find a customer and only seconds to lose one. But for many brands, their Customer Retention strategies are reactive, not proactive (at some point we’ve all experienced a brand suddenly flooding us with offers of cheaper bills, discounted products or incentives to stay after threatening to leave!) But is this really the best way to retain customers?
Read on to discover three ways that you can boost Customer Retention by taking a proactive approach…
What is Customer Retention?
The standard definition of Customer Retention is “the percentage of customer relationships that, once established, a business is able to maintain on a long-term basis”. But for those of you that are a little more visual, imagine your business as a bucket of water. You keep trying to fill it, but oh no! There’s a big hole in the bottom. So what do you do? Ignore it? Or plug the hole? This in essence is Customer Retention. By ignoring the hole (the amount of your customers that are churning) and filling the bucket with more water (new customers) you’re fighting a losing battle – no matter how hard you try, your bucket will keep leaking. But by acknowledging that you have a problem and dealing with your unhappy customers, you can plug the hole, boost Customer Retention and grow your business (and profits!)
Why is Customer Retention important?
In the words of Joni Mitchell, “don’t it always seem to go, that you don’t know what you’ve got till it’s gone?” A churned customer is a lost opportunity for your business. According to Gartner, 80% of your company’s future revenue will come from just 20% of your existing customers, and it costs five times more to acquire a new customer than it does to keep an existing one. But by reducing customer churn by 5% you can see an increase in profits of 25-125%, boost customer loyalty and encourage your customers to become Word of Mouth champions!
Use Proactive Communication to retain more customers
Sometimes a little bit of communication can go a long way. By keeping your customers proactively informed throughout their journey with you (e.g. by sending them a confirmation, reminder or an update to their order) you can give them all the information they need before they have to ask for it. This not only frees up resource in your Call Centre, where handling low value queries is common place, but also reduces customer effort. And what do smooth, easy interactions result in? Delighted customers.
Predict customer defection by capturing Fast Feedback in real-time
Sometimes your most unhappy customers may choose to leave you. But do you know why? Rather than finding out when it’s already too late, you can proactively ask your customers for their feedback in real-time and nip any problems in the bud before they become fully fledged complaints. Ask your customers for their feedback in their own words, at the Moment of Truth when their emotions are at their highest and they’ll be more likely to tell you exactly how they feel about your brand and services (Gartner state that feedback collected at the point of service delivery is 40% more accurate than that collected 24 hours later!) From there you can sort your Ranters from your Ravers, giving you the opportunity to save at-risk relationships and improve Customer Retention.
Boost Customer Retention by taking real-time, inspired action
By using a Fast Feedback solution, you can not only capture real-time Voice of the Customer, but analyse it too. Our technology allows you to identify any recurring themes or problems in your feedback, so you can take action on what your customers are saying and show you’re truly listening.
How can our technology help you to improve Customer Retention?
Our Proactive Communication and Fast Feedback solutions are designed to keep your customers engaged throughout their journey and capture their feedback in real-time, helping you to monitor Customer Satisfaction and ultimately boost Customer Retention. To find out how our solutions could work for your business, take a look at our Rant & Rave Platform.
How Our Clients Benefit
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The MOD rely on the Rant & Rave Platform as a vital part of their Incident Communication strategy, sending out thousands of urgent messages globally.
Scottish Water do something unheard of in the water industry – receiving up to 50% response rates simply by asking their customers for feedback in real-time.