Too often, it’s assumed that acquiring new customers is the key to increased profits and improved brand reputation.And while acquisition does play a key role, it isn’t the ultimate driver of business success.Contrary, retaining current ones is. That’s right, the ones purchasing your product or service today are a hugely underrated source of revenue that, when engaged and communicated to effectively, can lead to unprecedented business success. In this blog, we’re looking at customer retention, how it can improve profits and the tools you can leverage to streamline the process.
Why Focus on Customer Retention?
Claiming current customers are the key to business success is a bold statement. So, let’s begin by putting some facts behind the profitability of customer retention.
Collected by some of the leading research firms, below are statistics on the impact of customer retention.
- Increasing customer retention rates by 5% increase profits by 25% to 95%. Bain and Company
- Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. Harvard Business School
- Repeat customers are 9 times more likely to convert than first-time shoppers. Adobe Digital Index
- 43% of U.S. consumers spend more on brands and companies they are loyal to (Accenture)
- According to Marketing Metrics, the probability of converting an existing customer is 60 percent to 70 percent. The probability of converting a new prospect, on the other hand, is only 5 percent to 20 percent.
- 89% of American consumers say they are loyal to brands with values they share (Wunderman)
- Quality customer interactions drive Centennials’ loyalty to a brand by 57% (Yes Lifecycle Marketing)
As evident through these statistics, there are a number of studies supporting the notion that loyalty and retention are the formulae to business success. In fact, many brands practice this strategy and praise it, as targeting existing customers is less costly and ends in greater relationships with satisfied advocates.
But maintaining relationships isn’t done by simply hard-selling or offering discounts. Appeasing current customers starts with adding value and providing unforgettable experiences that stay top of mind. This means getting personal, offering content and products of value to the customer, listening to comments and concerns, and being available on the customer’s terms.
Today, it’s cited that 30% of your revenue should be from repeat customers. So if you feel like you’re lagging or that number seems too high, it might be time to consider a tool to help you build retention and manage customer experiences.
How The Loop Platform Helps Retain Customers and Boost Loyalty
A pioneer in customer experiences, the Loop Platform provides the tools to be proactive in retention rather than reactive (when it may be too late!). In this section, we highlight the key features of the Loop Platform that help retain customers and build long-term loyalty.
Feedback is a critical component of retention. In order to build trust and loyalty, you need to be listening to customers and taking action when the experience is top of mind.
With real-time feedback, the customer can start the dialogue, and instead of dealing with it months later when they might have found another brand, you can communicate to save the experience in real-time. Whether the customer is on-site or writing in on Facebook Messenger, with real-time feedback management has the opportunity to understand and address the issue and prevent future ones.
Create loyal customers by always being available on the channel of choice. With multi-channel communication, you make it easy to start a conversation and collect feedback using online and offline channels, in-location.
Additionally, you can transition customers seamlessly between channels and ensure the experience in-location and online is consistent. Whether you choose to collect feedback or start a conversation through web, kiosk, SMS, Facebook Messenger, or WhatsApp, you can easily engage at the customer’s channel of choice.
Collect feedback from every key touchpoint within your establishment to better understand what exact areas of your business need work. Compare multiple points while customers are onsite so you can ensure a consistent experience everywhere. Further, you can set a performance benchmark for loyalty, satisfaction and effort, so you know all touchpoints are up to par.
Customer Temperature at a Glance
Ensure customers are always satisfied. With the Loop Platform, you can see customer sentiment in real-time, in addition to trending topics that can help you adjust and personalize the experience.
With Loop, you can build retention by tailoring conversations and experiences through a robust suite of data and analytics. Leverage advanced text analytics to capture customer sentiment, understand motivations, and uncover opportunities at scale. The platform is easy to navigate and can help surface trending topics and customer preferences, so your team can continue to evolve programs and employees are trained effectively.
Engaging Employee Scoreboards
One of the most critical aspects of improving the customer experience and building retention is ensuring employees are doing their best to provide impeccable service.
With Loop, you can leverage the Scoreboard feature, a fun and interactive way to showcase employee performance metrics in the back end, so employees can understand customer satisfaction in the moment. Providing friendly competition, management can also obtain a more granular view to better understand over and underperforming employees.
Greater Satisfaction For Greater Retention
It’s evident that when you meet customer needs you increase satisfaction, which leads to better relationships. In the end, customers want to feel validated and tended to, which is why going out of your way to listen to feedback and tailoring the experience, fosters happier customers who will stay loyal to your brand.
More Tailored Content and Experiences For Long-Term Loyalty
With feedback provided directly from customers, businesses can better understand what customers like, dislike, popular trends, expectations, and so on. Using this insight, you can develop content and experiences that speak directly to the customer and address comments or concerns. This can help streamline operations, in addition to perfecting your product or service. With the insight gathered from customers, you can constantly evolve your business to continuously meet changing customer needs, for continued loyalty.
Happier Employees For Improved Service
A bi-product of happy customers and continued loyalty is happier employees. When you evolve your program and ensure customers are happy the atmosphere lifts and the experience becomes that much more enjoyable. In addition, it provides a great opportunity for employees to actually build greater relationships with management for continued growth, and customers for a more tailored experience.