Why You Should Focus More on Customer Retention than Customer Acquisition
With the Strategies to Increase Customer Retention
It is widely known that customer acquisition is important for the growth of your business. Customer acquisition is the process of bringing new customers to your business, and is one of the key components of growth.
But what some entrepreneurs still don’t realize is that customer retention is also equally important, even more important. If you don’t focus on it, you will find that your customer acquisition efforts will be ineffective. Customer retention itself refers to the ability of your customers to continue using your product or service for a long period of time.
Now, why is customer retention more important?
This has to do with the cost that you have to spend and the income that will be generated. A 5% increase in customer retention has proved to increase profits by 25% up to 95%, which is huge! Not only that, but in order to acquire new customers, you will have to spend 5 times more than to retain the existing customers. Customer retention is thus an important part of the growth of your business.
It’s also much easier to sell your products or services to existing customers, rather than finding new customers. The existing customers have experience of how your product or service worked for them, and they are willing to continue using it.
In addition, the customers will be more loyal to your business as compared to new customers. It is also important to understand that customer retention will improve the profitability of your business as long as it’s maintained for a long period of time.
Strategies to Increase Customer Retention
In order to increase customer retention, there are various strategies that you can follow. Let’s look at some of them.
Build a Great Customer Experience
Customer retention is about your customers having a great experience while using your product or service. This is achieved by making sure that your customers feel comfortable with your product or service and don’t have any problems using it. The main reason why people discontinue their relationship with a business is because of poor customer service. If you can solve their problems, they will continue to use your product or service.
Offer Ongoing Support
Offering ongoing support to your customers helps in increasing customer retention, because the customers feel that they are being cared for and that the business is committed to them as long as they are buying from you. There are several ways to do this, including offering ongoing advice, advice on how to use the product or service, guidance on improving productivity and training on how to make better use of the product or service which you sell. The better way of doing this is by providing good value for money for every aspect of the customer’s needs, whether it be financial, technical, educational or professional support services which can be accessed via telephone or email depending on what type of support is required at any given time.
Offer Something New To Keep Your Customers Interested
It is important to keep your customers interested in what you are offering, because if they stop using your product or service because they are bored with it, you will lose them forever. This is why it is important to keep your customers interested in what you are offering and that is why you should constantly be looking for new ways to improve your product or service and to make it more relevant to your customers. You can also send your customers special offers such as discounts, promotions, vouchers and discounts on new products and services which you offer.
Personalize Your Communication
It is important to personalize your communication with your customers because if you do not, they will feel that you are a big company and not a friendly business. If you can improve your customer service by improving your communication, you will increase customer retention. In addition, by personalizing your communication, you can tell the customers how much they mean to you and that they are important to you. By doing this, the customers will feel valued, and they will be more likely to continue using your product or service because of this.
Make Sure That Your Product or Service is User-Friendly
It is important to make sure that your product or service is user-friendly, because if it’s not, it’s going to be hard for the customers to use it. For example, if a person does not know how to use a software application, he won’t be able to use it effectively, so this means that if a person does not know how to use an application he needs, then he will need someone who knows how to use it to teach him how to use it properly. The same thing applies with your product or service, which needs training before being used properly so that the customers know how the product or service works and how they can use it effectively.
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces, and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.