Handling your business’s customer retention rate is certainly one of the most crucial parts to ensure your business is able to successful grow while at a sustainable rate. But what exactly is a customer retention rate, and why is it so important?
A customer retention rate shows how successful your business is at keeping customers paying for your goods / services over a certain amount of time. Retaining customers is so important because of the cost savings it offers.
It is much cheaper to retain and maintain the relationships with existing customers then it is to attempt to acquire new ones.
4 ways that can improve your customer retention rate
1. Initiate a VIP Loyalty Program
Everyone likes to feel special and feel as though they are a valued customer. Loyal programs are the perfect way to ensure this! By getting your customers to sign up via your website, not only will you have access to their personal information, but also it gives them a reason to come back.
You see a lot of loyalty programs in coffee shops (i.e. buy 9 coffees get the 10th one free), but this is about taking it to the next level. You could give them points for purchasing products at your store and then a few times a year they receive a gift voucher dependent on the amount they spent.
Also, sending monthly VIP emails with special offer is another good method to get your customers coming back because they feel special as they are getting deals that not many other people are getting.
2. Above and Beyond Customer Service
There are many examples these days of a customer having a very bad experience in a store and deciding never to go back there again. These bad experiences have now also been amplified by the power of social media. Therefore, if you or your employees are not providing positive customer service it is likely that you will have a low customer retention rate.
Businesses that provide excellent customer service are now seen as a rarity and a customer is unlikely to forget if they had an amazing experience in dealing with your business.
Components of excellent customer service include; ensuring quick response, a delivery process with no mistakes, providing customers with what you promised them and hiring employees that both suit your business and will provide customer service to your standard.
3. Don’t Ignore Negative Reviews
Most customers are reluctant to inform you how they feel. Therefore if you receive a negative review, it is not necessarily a bad thing. It could shed some light on an area you didn’t even realise you were lacking in.
It is important not to ignore these reviews because it can make a customer feel as though their opinion doesn’t matter. Also, by showing that customer you care and want to rectify the situation, they are more likely to return to your business.
4. Extra Rewards for Referrals
If you provide your customer with a good enough experience then they are more likely to refer family and friends. If so, it is important that you thank them for the referral.
Once the customer knows about the reward for referrals they might be more encouraged to refer friends and family.