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5 highly effective customer retention strategies


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“Customer centricity is not a short term tactic, but a mindset.” - Melanie Hoffmann, customer-centricity expert


Customer centricity is more than promoting a positive environment that enhances buyers’ experience or that offers great customer service. It is a mindset across the organization, a mission that must be embraced with the sole purpose of creating a seamless, fast and uniquely great experience for all customers/clients.


It is a way of doing business that fosters a positive customer experience at every stage of the customer journey. It builds customer loyalty and satisfaction which leads to referrals for more customers. Anytime a customer-centric business makes a decision, it deeply consider the effect the outcome will have on its customers.


“To me, customer centricity means considering what is the most valuable to your core customer from beginning to end.” - Melanie Hoffmann, customer-centricity expert



Customer centricity, a key to customer retention


As the economy grows increasingly customer-centric, customer retention becomes more vital to the success of enterprises.

It costs up to 7x more to acquire a new customer than to retain an old one, yet in most industries, the average customer retention rate is below 20%.


It is critical for a business to draw in customers, but the ultimate goal is to get those customers to return and become regular buyers. Customer retention is the range of activities aimed at keeping customers for the long-term and turning them into loyal purchasers. It also aims to improve the profitability of each existing customer.


Customer retention is a crucial part of any business’s operations. It is much easier to get an existing customer to buy from you again than it is to win new customers. Chance of selling to an existing customer is between 60–70%, compared to 5–20% for a new customer.



5 highly effective customer retention strategies


1. Send personalized email campaigns


Constant communication with a customer is the key to retention; email is still most customers’ preferred communication medium. Emails give the opportunity to continue building relationships with customers before and after their purchase. Sending regular, personalized emails with engaging content will keep the relationship with customers active.


2. Offer a well-defined rewards program


Rewards programs, or loyalty programs, are a great way to increase customer value because they motivate customers to purchase more frequently. It’s a mutually rewarding exchange for you and your customers as they get more value each time they buy, and you earn repeat business.


Starbucks has one of the most famous customer loyalty programs in the world, and it includes all three elements above. Customers earn points, which they call “Stars”, proportional to their order amount. Later, customers can redeem Stars for rewards that range from a free drink add-on to a free bag of coffee beans.



Image source: starbucks.com


Creating a rewards program can be simple, and you can offer customers points on their second purchase, or after they hit a set dollar figure in spending. You can also choose to set up automated loyalty apps that reward your customers for taking certain actions in your store.


3. Provide a great customer experience


“How you treat your customer, how well you listen and how you connect with them on an emotional level is your differentiator.” - Melanie Hoffmann, customer-centricity expert


Offering an exceptional customer experience is a great way to increase customer retention rates. Customer experience starts from when customers obtain their first impression of the brand, all the way through the purchase cycle and to when they, unfortunately, stop doing business with the brand.

To make a great customer experience, make a customer journey map, create buyer personas, establish a positive connection with customers, ask for and act on feedback, create helpful content, and build a community.


4. Identify churn triggers


The most obvious way to improve customer retention is to prevent customers from leaving. It is important to recognize the warning signs for when a customer is about to churn.

To identify these warning signals, focus on the key variables of customer behaviour that predict churn; such as purchase patterns, product usage, and customer support messages. Analyse these signals and then take direct action to catch customers before they churn.


5. Gather regular, high-quality customer feedback


Gathering customer feedback is one of the most powerful methods used to increase customer retention rates in business. If there is a need to know more about how customers feel about the brand, it helps to go directly to the source.


“To improve customer service look at statistics like customer reviews, NPS, Social media comments and interactions. Talk to a real customer and ask them about their most positive and negative experiences.” - Melanie Hoffmann, customer-centricity expert




Image source: Shutterstock


Collect customer feedback by sending out regular surveys, such as a simple customer satisfaction survey asking for a thumbs up/thumbs down rating after a support experience. These are the easiest surveys to complete, but sometimes you might want a bit more information.


Questions to ask customers include:


• How would you describe your experience with our product?

• What is your preferred customer support channel?

• Is there anything that is not working for you, and why?


Alongside surveys, feedback can be gathered from a customer support team who works closely with customers. They can identify common complaints and queries that can be addressed.



. . .


It is easy to focus on sales and marketing when running a business, to lose sight of the satisfaction of the existing customers will result in losing customers faster than adding them to a customer base.

Building a loyal customer following through the use of customer retention strategies will allow a continual growth and a strong and stable business that is able to survive ups and downs over time. They are what will carry the business through difficult economic conditions and allow it to stand up against the toughest of competitors.



Customer retention, balanced with excellent sales and marketing will allow a brand to be around for many years to come.


Watch or listen to the dialogue “Increase Customer Retention” on YouTube and Spotify


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