You’ve worked hard, gotten past the objections, and you’ve landed a customer. Whether they are your first customer or your ten-thousandth, what’s the most critical factor now?
Keeping them happy and retaining them for as long as possible.
If they walk away after one transaction, you have to begin the arduous process of finding a new customer to replace them. It’s tough for any business to grow this way, let alone even survive! You need to focus on building lasting relationships with your customers, every step of the way.
Simply put, ‘customer retention’ refers to what you to maintain a good relationship with your clients so that they continue to do business with you.[i] Ideally, you want your hard-won customers to feel that they have been well taken care of so that they want to deal with you again and again. Over time, you can increase the profitability of each of their transactions as time goes on, and they will recommend you to their network.
Every business is unique, but we can all benefit from the four proven strategies below.
“Retention Rate = ((CE-CN)/CS)) X 100
CE = number of customers at the end of period
CN = number of new customers acquired during the period
CS = number of customers at the start of period.”
While it looks a bit intimidating, it’s simply a matter of plugging in the numbers and using a calculator. With this formula, you can calculate your retention rate as a percentage. Every industry has its own gold standard, but you should aim for as high a number as possible. Speak with others in your specific field to find out their retention rate target.
It pays to think about customer retention
When it comes to customer retention, there is no substitute for having a great product and doing your best for your clients. Talk with them, maintain contact on social media, and send them letters and branded materials on a semi-regular basis.
However, without explicitly thinking about your retention strategies, you might be losing customers without ever knowing why. It’s essential to ask them for critiques and negative feedback so that you can grow and change. As you implement these suggestions, over time you’ll see the improvement in your customer retention rates.
Haden, J. (2013). Best Way to Track Customer Retention. [online] Inc.com. Available at: https://www.inc.com/jeff-haden/best-way-to-calculate-customer-retention-rate.html [Accessed 20 Jul. 2020].
Libin, P. (2013). Why I Love My Angriest Customers. [online] Inc.com. Available at: https://www.inc.com/magazine/201304/phil-libin/why-i-love-my-angriest-customers.html [Accessed 20 Jul. 2020].
Shopify (2019). Customer Retention 101: Grow Your Business by Selling More to Current Customers. [online] Shopify. Available at: https://www.shopify.co.uk/blog/customer-retention-strategies [Accessed 20 Jul. 2020].
White, R. (2013). Five Tips For Retaining Customers. [online] Forbes. Available at: https://www.forbes.com/sites/theyec/2013/08/23/five-tips-for-retaining-customers/#3d92635694ad [Accessed 20 Jul. 2020].
James Birch is the sales and marketing manager at Colour Graphics. He is an expert in quality printed marketing materials
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