Luring visitors and convincing them to try a product, service, or concept can often cost more than simply keeping an already engaged one where they are. In SaaS, it may often take a business four to five times more to attract a new purchaser than withholding old ones, translating to a trembling and momentous triumph that’s anything but the key to long-term success. On top of this crude reality, keeping a business afloat and thriving through constant inflows of new customers while the old ones dump the enterprises’ offerings is also less effective and complicates matters to irritating levels. For what’s worth, a business will have to constantly come up with efficient marketing strategies to lure newbies in.
While age-old marketing techniques demonstrated to boost ROIs through acquiring new consumers and withholding old ones still work, such as offering corporate gifts as small as samples or as consistent as personalised hoodies, times are changing as rapidly as customers’ preferences. Some old-school marketing techniques still hold, but new ones have just seeped into the marketing and business realm, making it vital to learn and draw parallels between them all to make the most suitable decisions when the focus lies on CRR.
So, here’s a rundown of the techniques that mark today’s business world and have enterprises tap into changing consumer preferences to grow the CRR as much as possible – in both the old and new way!
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What customer retention rate is and why it matters
In laypersons’ words, the customer retention rate (CRR) can be regarded as a factor or strategy measuring the percentage of returning customers, making profits from their purchases, and keeping them from shifting to contenders. In more sophisticated terms, it’s the technique of tracking churn rates for both monthly and annual periods, involving all sorts of metrics and finally understanding where buyers drop off throughout their purchasing journey.
Measuring this criterion is vital for any enterprise depending on recurring revenue, and given that we’re living in a world of subscriptions where more and more businesses offer their primes for a price, it’s fair to say that CRR is an increasingly popular metric.
You may often hear that attracting new customers costs more than retaining already engaged ones, and this saying isn’t far from the truth. Actually, it’s as accurate as possible, considering that studies have demonstrated that a simple 5% boost in CRR drives 25%-95% higher earnings. So, how is this astronomical hike possible?
The explanation is easy: familiar, repeat purchasers are likelier to buy, help word-of-mouth marketing, and employ fewer marketing dollars. Yet, retaining consumers is straightforward, particularly in nowadays’ fiercely competitive marketplaces where marketing can be the definitory tool to draw customers in.
So, let’s dive into today’s strategies to improve the CRR in order to maximize ROIs with the least investment possible.
Gamification to drive more transactions
What do Pokémon GO and business retention strategies have in common? They’re both based on convincing customers to do things they wouldn’t otherwise do had there not been an incentive on the table.
Pokémon Go is a perfect example of how willing individuals, particularly those young at heart, can engage in an activity when something is rewarding beyond the on-the-spot gaining. The game rewarded users for travelling kilometric distances through gamification, which enterprises now apply similarly to keep customers engaged and conducting transactions. The strategy is popular today and taps into consumers’ hope to get compensated beyond a mere transaction. In retail enterprises, the wealth a customer transfers into the store takes the form of points that are further applied as discounts or perks in subsequent orders. This strategy offers a sound motif for a purchaser to repeat the shopping experience; the funds spent now turn into discounts for tomorrow’s order. A similar rewarding result doesn’t have to come only from discount-typed incentives but also from palpable offerings taking the form of products for daily use, like personalized lighters, printed T-shirts, customized bags, miniature samples, and the list can continue – it all depends on the afferent company’s offerings.
Honing in on customer service excellence
Some companies bear the stigma of being disastrous regarding their interactions with customers in need. More often than not, it’s about the difficulty of getting along with a representative due to reasons like over-reliability on phone services and AI chatbots or over-complexity to get in touch with the correct department.
Flawless customer service represents today’s mainstay for keeping customers engaged and rebuying. When the customer service reps are empathetic, easy to understand, follow, and talk to, and straightforward to get in touch with, the enterprise has already crossed a customary achievement off their checklist. Add some customer support and service options like Shopify.com does, and it’s one step ahead of their CRR game. The heavyweight, for instance, has developed a devoted fan base through their customer support and service strategies, offering an e-commerce platform with community forums, a help centre for self-service, and email or live chat for traditional requesters. And to stand out, the giant responds to comments and questions on Twitter in a humoristic way. Undeniably, they’ve mastered this area like few companies do.
Encouraging ratings, testimonials, and reviews
Social proof, or endorsement that a company delivers on its promise, determines a customer’s decision to send an order or avoid a website altogether. In a marketplace inundated by information, the lack of proof to ensure credibility can be customers’ most remarkable break dealer, especially when such gold standards are easily findable within a few more clicks.
Shein provides a successful example in this regard. The bigwig has an all-encompassing rating system that hones in aspects like shipping delivery time, product quality, the suitability of the dimensions of the item received, comparison with the exhibited online product, and user satisfaction. Succeeding in enabling as many of these feedback solutions can only do good for the enterprise and build trust between the entity and customers.
Now, how are you going to convince your customers that your offerings are worth repurchasing or recommending to others?
