Any successful entrepreneur or business owner is fully aware that customer retention is an essential factor in the growth of their business. In fact, customer retention acts as the supporting lifeline of a long-term business.
For something this important in business, its definition is quite simple. Customer retention is the activity that a company undertakes to prevent customers from defecting to alternative companies, or rather to create loyal, consistent customers out of everyday patrons.
If you’re still not convinced of the importance of customer retention and how crucial it is to advancing your business, consider these two facts:
- It increases revenue – Businesses in every field spend ample amounts of revenue on sales, marketing and advertising, mainly to attract new customers. While this could be beneficial, it is not the most efficient strategy to use in the long term, simply because paying to gain new customers who may only visit once and never return will surely put your business at a loss. Customers who truly value your products and services more than that of your competitors will patronise your business more and this will increase your revenues and ultimately save you money.
- It helps you gain more referrals – Customer loyalty increases the likelihood of a customer telling others about how great it is doing business with your company. The most cost-effective form of advertising is by word of mouth because it shows that customers feel confident about utilising your business’ products.
There are simple strategies that business owners can implement to ensure successful customer retention, which in turn, can reap excellent benefits for your business as well as your customers.
It is important to note that customer retention is based on loyalty on the part of both the business and its customers, and this loyalty is established at the first contact and continues through the lifetime of the relationship between the two parties.
This means that the frontline representatives must be able to provide top-quality customer service. Business owners need to ensure that their employees are properly trained to serve the customers they encounter from day to day. They need to be pleasant, helpful and knowledgeable about the products and services the business provides. Customers often become indifferent or displeased when they are served by mediocre, apathetic and uninterested employees.
It is a fact that no one knows what the customers want better than the customers themselves. The most effective and cost-efficient way to gain this knowledge is by carrying out customer surveys. Every smart business employs this method to better understand the needs of their customers because it’s reliable and does not incur any loss for the business. As to how you choose to implement this method of research is up to you, whether it be online feedback or the traditional method of interviews or questionnaires. Whichever method you choose, you can be sure that it will help to increase customer loyalty and your grateful customers will be eager to speak highly of your business to others.
