Sales/Growth4 Minute Read
Customer Retention: Driving Sales and Maintaining Sales Base
When it comes to selling products and services, often a company’s focus is pursuing new customers. However, those customers you already have are more valuable than you likely realize. It’s much easier to retain customers than it is to procure new ones. What are you doing to keep your existing customers, who are vital to your company success? Let’s look at customer retention and why it’s a priority for growth and revenue.
What Does Customer Retention Mean?
First, let’s break down what it means. Customer retention is really two parts, churn and acquisition. Churn is how many customers leave you – canceling accounts or not returning to purchase additional goods and services. Acquisition is how many new customers you have obtained.
Why Customer Retention is Crucial for Business Success
Here’s why customer retention is so important. Obviously, existing customers add to your company revenue. However, there are a few more benefits you may not have considered. Positive word-of-mouth about your business is invaluable, and those people who are already fans of your brand are the best brand ambassadors you can possibly have. Additionally, your existing customers’ usage of your products and services offer data and insights that are key to your ongoing profitability. What’s working and what’s not, according to their buying habits? What are you hearing from them in terms of customer service issues? And how about loyalty? Your existing customers spend more and buy more often than new customers. Also, they will pay more for premium items as they are already satisfied with your offerings.
The Retention Rate Formula
Are you interested in figuring out your customer retention rate? Here’s the formula:
How to Increase Retention
Given your data and insights, you have a good idea of what your current customers want and need. Drill down on their pain points. How can you resolve those? Track and analyze those churn metrics to find ways to improve their satisfaction. Do you offer a loyalty program with perks and benefits? Many customers stay with brands specifically because they can earn points and gain greater rewards through purchases. It’s an effective way to offer more than your competition. Another way is to communicate regularly with them. This keeps you top of mind, and if you offer content that is relevant and educational, it keeps them engaged with your brand. This is an opportunity to share case studies and customer success stories because it’s helpful for them to know how you are achieving results for your audiences. Finally, that human touch is the defining element of the customer experience. Providing a high standard of customer service with agents who are empathetic, friendly, and knowledgeable about your brand instills a real sense of a company who puts their customers first.
Keeping the customers you have happy offers you so many opportunities for ongoing success. Not only does it help increase revenue and brand loyalty, but it also has the potential to bring in new business. Prioritizing customer retention and focusing on ways to continually improve will propel your brand forward and continuously increase growth of satisfied customers.
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Senior VP Business Development
Published on April 13, 2022
Published on April 13, 2022