As we know, building customer loyalty is a job in its own right that requires putting in place a strategy to achieve this in the long term. After having made so many efforts to have customers, we want to keep them at all costs. Why is it so important to increase your customer retention rate? And above all, how to go about it? Need help with your business or just curious to know more about the subject? You will see, it is not necessary to have done major marketing studies to grasp. We’ll mix a little logic and common sense and you’ll understand everything quickly. I promise! Let’s go!
Table of Contents
What is customer retention rate and how to calculate it?
Definition
We talk about customer retention rate or Customer Retention Rate to define the proportion of customers who remain loyal during a period. This term is more commonly known as: customer loyalty. It determines a company’s ability to federate and keep its customers.
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Before proceeding with the calculation, it is necessary to determine a period: month, semester, year… Once the latter has been chosen, you can start:
Retention rate = ((total customers at the end of the period – customers acquired during the period) / customers at the start of the period studied) x 100
You then get your rate. If it’s high, above 50%, it means you’re comfortable with retention. On the other hand, if it is low, below 50%, it will be necessary to put in place arrangements to improve it.
Note that it will be interesting to compare this rate with that of previous periods.
1. Gain visibility on the web
It is essential that your customers see you frequently so that they think about buying your products. You have to keep in mind that your image and your values constitute your notoriety. The more a brand communicates, directly or indirectly, the more it gives itself the means to increase its turnover. Nowadays, visibility on the web is essential to retain customers. Moreover, according to an Ipsos survey, 53% of companies questioned consider digital as a means of developing local commerce. To do this you can optimize your communication through your website, your posts on social networks or any medium where the image of your company is conveyed. Consider using the services of an SEO web editor to help you set up your communication. A professional will know how to set you apart from the competition by highlighting your services, but also by improving the user experience on your website. Thus, your referencing on Google will improve and you will go back to the top in the search results of Internet users.
2. Be close to your customers to build loyalty
Creating closeness with its customers allows them to feel understood and privileged. You can, for example, create a community on Facebook. For this, the help of a community manager will be essential. Social networks are excellent ways to get closer to your audience. Through this, you will have the possibility of interacting directly with your customers by offering them, for example, “tips and tricks” concerning your products. Or by communicating to them a preview of product launches. In addition, your customers will be able to discuss your brand with each other. Very quickly you will be able to spot ambassadors in your community. You will then be able to contact them to consider a partnership with them. Also think that an excellent commercial and after-sales service are undeniable assets. You can set up an online chat on your website. You will then be in constant contact with your customers. And, your customers can count on you at any time. By using the right marketing strategies, you will improve your customer loyalty and set yourself apart from the competition. Make your customers “unique”. The personalization of your exchanges will demonstrate that you know them perfectly and are therefore able to offer them “tailor-made”.
Several useful tips below:
Send useful newsletters
Newsletters should be sent wisely. It is strongly advised to hire a professional ghost writing agency to write them. Without it, your e-mailings risk ending up in the trash without having been opened. In addition, a qualified person will naturally identify your target and above all, will be able to give you detailed and quantified feedback on the campaigns you have carried out.
Create a blog
This is all about creating content for your customers. Thanks to the blog, you will be able to subtly develop links between your articles and direct your customers to your products. Your customers will appreciate having their questions answered. Note that, according to Mediatory, the French spent around 2 hours and 25 minutes per day on the Net in 2020. And this figure continues to grow.
3. Establish a climate of trust with your customers
This is the basis of any healthy relationship. When a customer knows that he won’t have any problem in his exchanges with you, he is reassured and feels safe. He is therefore more inclined to order your products and also, he will recommend you. And what better than word of mouth to increase your turnover? Relevant and quality exchanges with your customers will be the key. You have to master your offer at your fingertips. Training may be required if you sell technical products. Or, you may simply need to document as much as possible on your subject. Be able to offer your customers what you yourself would like to find as a customer. And seen like that, you will see for yourself all the improvements you will be able to make.
4. Offer quality service to build customer loyalty
Quality service shows that you respect your customers by constantly striving to satisfy them. Companies that offer this are rare. Thus, you will be able to stand out very easily from your competitors. The easiest way to develop this service is to establish procedures. They will allow each of your employees to know how to deal with problems or questions from customers. We have all been confronted with people who, when you call them for a question or a dispute, do not know how to answer. It’s annoying, you’re wasting your time. In the end, we keep a bad image of the company.
5. Set up a loyalty program
This simple advice that seems so obvious helps to capture and retain customers. Indeed, a customer with an advantage in a store (discounts, gifts, personalized advice, etc.) will be more willing to return to buy in this same store. You should know that, according to an Ipsos study, 9 out of 10 French people have at least one loyalty card. Loyalty programs that work well are those that offer immediate discounts to their loyal customers. After spending x euros, you give your customers a voucher for x euros. Small additional advantages such as a small gift on birthdays are also very appreciated. You can also imagine offering a loyalty program in which your customers would have access to tutorials on your products or on a similar theme.
As you will have understood, the retention rate is a tool for measuring customer loyalty. Working on it is an excellent vector for increasing your turnover. You should know that if the rate increases by 5% then your profits will increase by 25 to 95%. Interesting, no?
