Let’s face it, acquiring new customers doesn’t come cheap. But the cost is always worth it if you make the sale, right?
Well, that depends.
Without a solid retention strategy in place, you’re not getting the most possible value out of the time and energy you spend on acquisition.
Let’s take a closer look at how improving customer service and customer satisfaction can ultimately boost your retention rate, cut costs, and increase revenue in the long run.
How Much Do Poor Customer Experiences Cost Your Business?
Did you know that acquiring a new customer is 6 to 7 times more expensive than retaining an existing one? Not only are there high upfront cost to converting even a single new customer, but there’s no guarantee that they’ll remain loyal to your brand in the future.
In fact, one bad buying experience is often enough to turn customers off of doing business with you altogether. More than 9 out of 10 customers (91%) will refuse to give you a second chance if their first interaction with your business is negative.
How can you protect your brand and your business from these losses? By shifting your focus to delivering quality customer experiences. Better customer relationships equal higher rates of retention – which comes with its own slew of high-value benefits.
The Benefits of Boosting Customer Retention
Just how much value does a good customer experience provide to your business?
Well, consider that 3 out of 5 consumers would be willing to switch to you from a competitor for a better experience. And another 86% of customers are happy to increase their spending if they receive amazing customer service.
So, not only do great customer experiences help win new customers, it also increases the likelihood that they’ll spend more, remain loyal, and 78% will even refer family and friends to your business, too.
Possibly the most important takeaway from existing retention research is that improving customer retention by as little as 5% can increase your profits by 25-95%!
The Art of Sparking Brand Loyalty
When it comes to creating a brand that people are proud to support, the key is to establish a meaningful connection with your customers.
This could mean choosing a social issue or cause to support in solidarity with your customers. Or it could mean finding a common enemy or pain point that you and your customers are fighting against together.
Whatever it is, seeking out common ground or shared point of view will help you build stronger relationships with your audience. Especially since 64% of consumers say sharing a business’ values is the primary motivator for brand loyalty.
The Science of Customer Retention: Which Metrics Should You Focus On?
When it comes to customer acquisition, the goal shouldn’t just be to convert – it should be to nurture a new relationship.
You can track how successful your retention strategy is by measuring your retention rate and rate of customer churn. Look for changes over time so you can pinpoint exactly what’s working best and what’s not.
sWe also recommend measuring your net promoter score and customer effort score at regular intervals to gain a realistic understanding of how your customers feel about your brand and the experiences you provide.Remember, rather than focusing on a one-time conversion, aim to inspire long-term customer loyalty.
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