You probably agree that making money from existing customers is easier than new ones, but you would be surprised to see how effective it is. In fact, a 5% increase in customer retention can increase company revenue by 25-95%. In this article, I will show how you can Retain Your Existing Customers and Dramatically Increase Your Revenue.
Unfortunately (or fortunately for you!), most businesses are so busy acquiring new customers that they rarely pay attention to customer retention. You shouldn’t be like them, and as you will see, increasing the customer retention rate is far easier than you think, and the result is beyond ordinary.
What Is Customer Retention?
Before getting to the actual tips, it’s important to review what exactly customer retention is and how we can measure it.
🔸The Marketing Definition
Customer retention is the ability of your company to retain existing customers. In other words, it’s your ability to make previous buyers return and buy more.
🔸Why Do Customers Leave?
To start improving customer retention, we need to understand why customers leave. Customers, by definition, have traversed your sale funnel at least once. So they know about your company and have already become interested in your product or services.
Assuming your customers are still alive (it could be pretty dramatic otherwise), the problem is usually because they:
- Were dissatisfied with your product
- Found better prices
- Found better alternatives
- Didn’t like the way they were treated
- Forgot about you due to a lack of exposure
- No longer have the purchasing power
It’s usually due to the first five causes of a healthy economy. But usually, there is a mixture of all the above causes.
🔸How To Calculate Customer Retention?
To make things precise, we define Customer Retention Rate (CRR) as follows:
Let’s say you have 500 customers at the start of the month. During the month, you acquire 100 new customers. And finally, at the end of the month, you have 510 customers (you have lost some of your existing customers).
Then your CRR would be:
[(510-100)/500]*100 = 82%
Of course, it’s far less than that in the real world! The average CRR for eCommerce stores is 30%.
Now let’s review our 10 different techniques for increasing customer retention.
13 Ways to Retain Existing Customers
We divide our actions into two categories, Technical and Psychological, although the distinction is not always clear, and there are overlaps.
✅ Technical Actions
Let’s start with the technical ones. Fortunately, you don’t need to hire a programmer to implement most of these actions! If you are using WordPress (or any other popular CMS, there are great plugins to implement them quite easily).
Whenever possible, I offer my favorite plugins for WordPress as it’s currently the most popular CMS, and I love building websites with WooCommerce.
1) Improve the User Experience
No matter how good and reasonably priced your products are, customers won’t return if they don’t have a satisfying online experience. They switch to a competitor offering a Better User Experience and always do it by instinct.
User experience is a vast topic deserving its own article, but it’s pretty easy to improve despite the apparent complexity.
To start, you should check the following on your website:
- Buttons are where they should be and work as expected: for Example, CTA buttons should be big and visible, preferably on the right on desktops and at the bottom on mobiles.
- Graphics, colors, and fonts are consistent, not distracting, and enchanting.
- Minimal or no deliberate thought is needed to perform common actions like ordering, canceling, and adding to a wishlist.
- Essential features are available: For example, Wishlist functionality and a share button.
Of course, all of this should be judged by someone unfamiliar with your website, and that’s where most store owners go wrong. They judge their website themselves, forgetting that they are accustomed to how their website works and that it looks familiar to them. Your ultimate goal should be to make every part of your website as easy and intuitive as possible.
Luckily, improving user experience doesn’t demand much technical knowledge, and plugins are more than enough. The following plugin is just an example.
Plugin review: TI WooCommerce Wishlist
Ti WooCommerce Wishlist sets up complete wishlist functionality in your WooCommerce website within a few clicks. Customers can then add their favorite products to their wishlists and share wishlists with friends, improving the overall user experience.
2) Offer a Loyalty Program
Loyalty programs have long been successfully used in increasing customer retention rates because:
- Customers feel better treated and more important
- They come back more to get awards and don’t forget about you.
A good loyalty program rewards users for purchasing and other helpful actions like writing reviews, sharing products, etc.
That being said, running your loyalty programs is essential; fortunately, it’s straightforward in WordPress via a plugin.
Plugin review: SUMO Reward Points
SUMO Reward Points is a premium WordPress plugin that allows you to quickly run your customized loyalty program. You can reward your customers for purchasing, signing up, writing reviews, doing Referrals, using coupon codes, sharing products, etc.
3) Offer Excellent Customer Support
God knows how many customers leave an online store only because they are unsatisfied with the customer experience. Don’t let that happen to you.
Customer support is both psychological and technical. Still, I’m going to focus on the technical aspects of it.
Many website owners think having an active telephone number is enough, while it’s definitely not. Many people don’t have the time to make a phone call. Instead, they love lives chats, emails, and online tickets.
Start with the following list for your live chats. All of them are very easy to implement and help you retain your existing customers:
- Add live chat to all your pages.
- Add a call button to be displayed on mobile devices.
- Communicate clearly that you are ready to help.
- Instruct operators to use friendly and personal language.
- Reduce response time as much as you can, and avoid using bots. (bots are not very helpful in guiding people!)
Plugin review: Tawk.to
Tawk.to is my favorite live chat service. It’s completely Free (you only need to pay when your website grows considerably) and very easy to set up. It allows you and anyone in your team to answer chats via mobile, desktop, or web applications.
Plugin review: Call Now Button
This plugin places a click-to-call button at the bottom of the screen for your mobile visitors. Then visitors can call you simply by touching the button.
4) Adopt Email Marketing
Many people think email marketing is dead, but the mere fact that influential and innovative brands with heavy marketing budgets still use it says everything!
Email marketing increases customer retention rate because:
- It doesn’t let customers forget about you (even if they don’t open the emails!).
- It allows you to communicate better with your customers and increase customer satisfaction.
You can use email marketing to promote new products, give discount codes, and receive customer feedback.
Here are a few tips for making the most out of your email campaigns:
- Use personal and friendly language
- Always use the user’s name in the emails
- Use attractive visuals
- Use bold and visible CTA buttons
- Be creative with the content and title
Plugin review: MailPoet
MailPoet is a powerful plugin by the same team behind WooCommerce. It allows you to design customized emails and send them automatically to your users.
The Premium Email service is entirely free for websites with 1,000 or fewer users.
However, as the number of users grows, you should consider using services like Mailchimp to send your emails!
5) Create a Customer Feedback Loop
No matter how well you try to improve customers’ total experience within and after the purchase, there will be things they don’t like. Why not ask them instead of finding a problem yourself?
Here are some ideas:
- Email a link to a survey after the customers receive the products: start by gathering a few important questions about the products, price, packaging, shipping, etc.
- Call some of your customers randomly to ask their opinion.
- State clearly that you like to hear from your customers and even create a form for that: It’s as simple as making a simple form for customers to express their feeling about your brand.
Plugin Review: Customer Reviews for WooCommerce
Customer Reviews for WooCommerce allows you to send your customers an automated personalized email reminder right after the order is completed. You can also set a delay to send emails after a fixed time following the order completion.
6) Offer better delivery and return options
Customers’ preferences change; they may no longer be willing to wait so long to receive a product or even move to a new city where your current shipping methods are costly. Offering different plans and return options prevents them from switching to a competitor and, most importantly, shows that you care about them.
Here are a few tips:
- Offer a generous return policy, for example, 14 days no question asked money-back guarantee.
- Provide VIP and standard shipping options.
- Offer free shipping for orders with a total above a certain amount.
7) Boost your social media presence
More than half of the world now uses social media (58.4%), and the average daily time spent using social media is 2h 27m. That’s more than enough to make you think of improving your social presence.
Being active on social media is helpful because:
- It’s an excellent feedback channel to learn more about customers’ experiences.
- With everyday exposure, customers are less likely to forget about you.
- By seeing engagement from other customers (social proof), customers become more loyal and bring in new customers.
The most important thing about social media is that it changes a lot, probably faster than anyone thinks. It’s crucial to move with the trends. For example, TikTok-style videos have gained massive popularity, and you probably don’t want to miss that.
You also should publish valuable content regularly to keep your customers attracted to your business and mission. Moreover, by not advertising your products directly in the content, customers start trusting you more and seeing you as an authority in the field.
Here are some things you should do:
- Identify your mediums: It can be social networks, your own blog, video-sharing websites
- Identify the type of content: It can be ebooks, podcasts, short videos, infographics, and even games
- Find out about your customers’ interests: What do they like and enjoy the most? It’s best to be something highly related to your products or services.
- Create an editorial calendar: Specify when and where you want to publish your content and be consistent.
✅ Psychological Ways
Now it’s time to explore psychological actions. Remember that these are not separate from technical ones and should be considered when implementing technical actions.
1) Create a Unique Brand
Your brand is your identity. It’s how your customers see you if you are an actual person. Some are friendly and fun, while others are serious and determined. It’s essential to build a brand that customers love and respect.
Start by defining key personalities you like to exist in your brand. Don’t list more than 3 or 5. It’s tempting to want to be everything to everyone, but that doesn’t work. In the end, there should be only one strong personality that differentiates you from competitors. Focus on that!
For example, the automobile producer VOLVO is famous for producing the safest cars (which is not necessarily the case today), and Apple is famous for innovation and simplicity.
Then, of course, your brand should be reflected in every action you take, from setting prices and writing product copies to choose colors and designing graphics.
Needless to say, your actual products or services are the most important.
2) Be Honest and Transparent
Customers see companies as business firms that only think about profit and lie as much as possible. You might see that as an exaggeration, but we all have cynical views toward companies to some extent.
Hopefully, you can change your customer’s views about your company and even use it as a competitive advantage.
Be honest when other companies lie, tell things they don’t, and you will benefit from it more than you think.
3) Make Each Customer Feel Important
You can’t build a genuine, long-term relationship with your existing customers and retain them without giving them the impression that you care about them. (and you should really care about them!)
Here are what you can do to show your goodwill:
- Use a language that shows you care about them: for example, write success stories about your customers and use emotional language to show your affection for them.
- Pay full attention to their complaints and understand them.
- Genuinely thank them for choosing you over competitors: even a simple thank you card sent with the product does a lot!
- Send them gifts (and not coupons) to show you really care about them.
4) Promote a Common Cause
Fighting for a Common Cause is the best way to change cynical views toward your business and retain existing customers.
It builds trust, and customers start helping you towards the goal (by recommending you or buying more from you!).
It can also serve as your critical personality trait and differentiate you from your competitors.
If you don’t have any idea, here is a list. Remember that you can choose anything your potential customers care about, and it’s best to be something relevant to your business.
Some common causes:
- Saving the nature
- Fighting a specific disease
- Increasing social justice
- Fighting racism
- Saving an endangered species
Success stories of companies following social responsibility are a lot.
just as an example, the shoe brand TOMS has set the mission to donate a pair of shoes for every pair they sell which has resulted in the donation of over 100 million pairs of shoes to children in need (TOMS has changed its strategy to donating one-third of its profits instead of shoes to support local shoemakers).
Of course, you don’t need to be that generous! Even small (but honest) acts like supporting a movement on social networks are well appreciated by customers.
5) Personalize Your Communications
Finally, to build a good healthy relationship with your existing customers and retain them, you should personalize your communication as much as you can. It is ideal for creating a knowledge base about your customers.
You can gather information like:
- Name and last name
You can then use this information to create a unique experience with your customers whenever they reach you, whether by email, phone call, or live chat.
When a customer reaches you either via phone or live chat, the operator can quickly find her with her email address and then use her name to make the talk more friendly. Other information can also be used according to the exact circumstance.
As you know by now, Customer Retention is far more important than Customer Acquisition. If you can keep existing customers, they will bring new customers on their own.
Of course, customer retention isn’t a one-time process. Everything changes and your strategies and plans should change with them. What worked 10 years ago might be obsolete today, and customer retention is no exception. You should understand and change with your existing customers to retain them.
I hope you liked this article and if it’s the case, please share it with your friends.