Every business will focus on converting leads into customers and making a sale. However, most will fail to retain these existing customers and give them the attention they deserve.
Contrary to what some may think, the customer’s journey doesn’t stop at the conversion point, but is instead stretched to encompass two more stages: retention and advocacy. These steps are crucial to increase word-of-mouth recommendations, loyalty, and greater profits in the long term.
Unfortunately, a common struggle businesses face is the ability to retain customers and increase their lifetime value.
In this article, we will explore the possible reasons why this is the case and offer solutions to help you overcome this obstacle and stir your business in the right direction.
What Causes Low Customer Retention?
First of all, it could be that these individuals have experienced poor customer service after they bought from you and, therefore, are unwilling to stay in touch and shop with you again. They may not regret buying your product or service per se, but due to the lack of attention and customer care, they prefer to leave and look for a company that can give them the bond they seek.
Another reason you may struggle to retain customers is that your outreach isn’t timely or relevant (i.e. existing customers are not receiving anything from you). You are so focused on attracting new customers that you are failing to keep in touch and offer value to these people, whether through newsletters, social posts targeted to them, or something else.
It could also be that you fail to reward loyal customers. It’s easy to focus your marketing efforts on new potential clients, but it’s not the only way to generate a profit. On the contrary, repeat customers spend an average of 67% more than new customers, making them extremely valuable to your business.
Similarly, the reason why existing customers may leave is that you only offer one product or service, and they already have it. Failing to cross-sell and upsell can lead to decreased customer retention simply because your offering is too limited. So, these individuals are forced to look somewhere else to satisfy their shopping needs.
Solution: Give Existing Customers the Attention They Deserve
Improve Your Customer Service
If you’re looking to retain customers and increase your customer lifetime value, the first thing to do (if you haven’t already) is offer excellent customer service. It’s a simple task, but it’s surprising how many businesses don’t give the same attention to existing customers as they do to potential ones.
To increase your retention rate, you should also consider replying to both positive and negative online reviews. Think about it: if an existing customer took time out of their precious day to leave you feedback, you should reciprocate by thanking them and offering additional information if required. By actively replying to reviews, you are highlighting how much you care about your existing customers and are constantly working to satisfy their needs and solve their complaints.
One of the reasons why a business may have a low customer retention rate is due to a lack of outreach and relevance. If this is a problem, there is a simple solution. Keep your existing customers engaged and informed through various content formats so you can keep them up-to-date with your company’s growth.
While regular content is one way to offer value to these individuals, it is not the only one. You could offer exclusive access to ebooks, give them a discount or gift a free item when they reach ten purchases. If suitable, you could also offer your or your team’s time and provide a free call. It’s really up to you what you want to offer, but it’s crucial to follow through with it as rewarding loyal customers can be the core difference between you and your competitors.
Cross-Sell and Upsell
To keep your customers coming back for more, remember to cross-sell and upsell. These people already know who you are and have bought from you before, which means they are actively interested in what you offer. So, focus some of your marketing efforts on advertising different products or services to this hot audience.
For instance, Apple does a great job of getting recurring customers by regularly offering new products. If an individual has purchased an iPhone, Apple can cross-sell phone cases, AirPods, chargers, and more. When the latest iPhone comes out, they can advertise it to this customer because they know there’s a high chance they will be interested. Based on its tactics, it’s no surprise that Apple has over 90% brand loyalty across the US and Europe.
Improve Your Customer Retention Rate Today
Retaining customers and building loyalty can yield great benefits to any business looking to grow and succeed. Unfortunately, as we’ve seen, there are several reasons why your customer retention rate might be low. Poor customer service, lack of outreach, failure to reward loyal customers, and limited offerings are some of the causes that could drive customers away. However, for every problem, there is a solution. By providing customers with the attention they deserve, you can improve their perception of your business, which will, in turn, increase your retention rate.