If you’ve ever wondered if there’s a connection between customer retention and profitability, wonder no more. Research from the Harvard Business School shows a direct correlation between customer retention rates and profits. Namely that when customer retention rates increase by 5%, profits increase anywhere from 25% to 95%. That makes sense when you find out that it costs six to seven times more to acquire new customers than it does to keep existing ones loyal. The best way to increase your customer retention rate is by developing great customer relationships. Here are three areas where you can improve customer relationships:
Communication – Have you ever had a relationship with someone that you’ve never seen or heard from? Neither have we. If you want to remain top of mind with your customers, you must reach out to them to let them know you care. This communication will foster a relationship that is invaluable to retaining their business. Most often people buy from “who they know,” and when they know you because you communicate with them, they buy from you more.
Social Media – Social media is not going away and is used by a large majority of the population. If you want to engage in relevant communication with your partners and customers, use social media to promote your products and services, or to give a shout out and promote your clients. It even allows your clients to engage with each other. To top it all off, aside from the investment of time, it’s completely free! Also, don’t be worried about negative press. Social media allows you to find solutions in front of all, spinning the negative into a positive and creating loyalty and free PR.
Promotions – The promotions you advertise must be relevant to your customers, and also to where they found said promotion. You wouldn’t run a promotion that gives discounts for sharing a post through PPC, so make sure that where you post a promotion makes sense with the promotion itself.
The Gartner Group statistics say 80% of your future revenue will come from 20% of your current customers. That makes the promotions and communications to your customers very effective and necessary ways of keeping them actively engaged with your brand.
If you’d like to learn more about how to start your own customer loyalty retention program, call us today at 1-866-567-7432.