Did you know that, according to Invesp, it costs 5x as much to attract a new customer than to keep an existing one?
You read that right! Besides, 80% of your sales come only from 20% of your customers. Exactly why customer retention strategies are all the hype!
When you are doing business, you always need to focus on getting more sales. Most retailers and business owners focus on attracting and getting new customers, which is difficult and costly, too.
Excellent Customer Satisfaction, Trust and Loyalty, and a Strong Brand Identity will help you acquire more and retain your existing customer base. But you might be wondering, “How to retain customers in retail?” and “why customer retention is important?”.
In this blog, we have covered some amazing strategies for customer retention that you can use right away!
What is Customer Retention in Retail?
Customer Retention starts at the first interaction with a customer and continues throughout their relationship with your brand. A customer who buys from you again after they have bought from you previously.
Customer Retention Rate = number of customers/total amount of transactions.
If this ratio were 100% then you would have no losses because you would only ever lose 0 customers.
The goal of Retail Customer Retention is to increase this ratio. You need to have a strategy in place to ensure that customers get what they want, when they want it and how they want it delivered.
What is a Good Retention Rate for Retail?
A good retention rate depends on the industry. For most sectors, the average is under 20%. The retention rate in the retail industry is 63% which is fairly low compared to other top examples like banking, insurance, IT services, etc. The reasons are lack of difficulty to leave and high competition.
The Importance of Customer Retention in Retail Business
Retail is considered the backbone of any business, where businesses rely heavily on customer retention. Customers have the power to decide whether your company will succeed or fail. Thus, retaining your customers is paramount in order for your company to thrive.
You may think that customers do not care about your products or services; however, they actually do.
By providing good service, you make customers feel valued and appreciated.
1. Loyalty and Repeat Purchases
Customer retention is basically the act of keeping existing customers who want or need your product/service. Repeat purchases are those done by customers after returning to purchase again from your company.
These customers come back due to the fact that they enjoyed your previous transaction and are expecting similar treatment. You can easily attract these loyal customers if you provide them with quality services and products. Providing a great customer experience can persuade them to become your brand’s best customers.
2. Brand Awareness
Loyalty is not only limited to your current customers. Your brand awareness can spread further with social media marketing. You can create your own Facebook page and Twitter account to reach out to your general audience.
Make sure that you share interesting content that people can relate to so that your followers would visit your page regularly. You can also promote your page on forums and groups related to your niche industry.
3. Establishing Relationships
You should always remember that customers buy from you because they trust you. This means that you must establish relationships with your customers. If customers find you trustworthy, they are likely to return to your store again.
To maintain customer relationships, you must offer discounts or freebies to your loyal customers. Also, you can reward them for referring others to your company. You can even go beyond that by sending thank-you cards or gifts to customers.
4. Increase Sales
When customers feel comfortable with your company, they will be more likely to spend money with you. Therefore, you can increase sales by offering special promotions and deals to loyal customers. For example, you can give away coupons or discount codes when customers refer friends to your business.
5. Customer Satisfaction
In conclusion, building customer satisfaction is truly essential in every business. However, customer retention cannot happen without proper customer satisfaction. In order to retain your customers, you must satisfy them by providing good service.
What is Customer Retention Strategies
Customer Retention Strategies (CRS) is defined as any action taken by an organization to retain current customers and attract potential customers. In marketing, this means keeping a company's existing customers happy and getting them to recommend your product to friends and family.
The 7 Best Customer Retention Strategies For Retail to Boost Revenue
To keep loyal customers coming back, it’s important for companies to know what they need to do to retain their existing client base.
Being a retailer, do you know “How do retail stores retain customers?” or “how to retain customers who are leaving?. If not, then keep reading further for numerous ways to retain customers.
Let’s see what are the 7 Customer retention strategies that will help you keep your customers happy and loyal to you, along with some customer retention examples.
1. Create a Unique Selling Proposition (USP)
The first step to ensuring customer retention is to create a unique selling proposition (USP). A USP is essentially a statement that differentiates your business from competitors, giving you something special and appealing that sets you apart from the rest.
Your USP should not only convince potential customers to purchase products from you, but should also help motivate current customers to continue purchasing from you. What does this look like? Well, whether it’s your product line, service, pricing, quality, or anything else, make sure you find a way to stand out among your competition.
2. Know your Audience
It’s important to understand who your target market is before making decisions about how to promote your business. If you’re trying to reach new customers, advertising on social media sites may not be effective.
On the other hand, if you want to improve your ranking on Google, knowing where your customers first look for information online could help you decide where to place your ads. Consider using analytics tools to learn more about your website traffic.
3. Offer Excellent Customer Service
At the beginning of any relationship, people tend to focus on price first. However, if you want to retain long-term customers, you should make sure that you provide excellent customer service. Your customers have invested their time and money in becoming loyal clients of yours, so do not take advantage of them.
Make it a point to return calls promptly, respond to emails in a timely manner, and provide a quality product or service.
When your customers have a question or a concern, make sure to respond as soon as possible. This demonstrates that you're on top of things and ready to help resolve the problem. Of course, you also want to ensure that your response is both helpful and satisfying.
Source: Superoffice
Also Read:- Benefits of Chatbots in eCommerce
4. Implement a Referral & Reward Program
Referral marketing is one of the best customer retention strategies that involves actively encouraging customers to tell their friends and family members about their experiences at your business. Once someone tells a friend or family member about your business, you can then reward that person for being a good ambassador by giving them a discount or some sort of prize.
If you are a restaurant, you might give a $10 gift card to anyone that refers two additional guests. If you own a clothing store, you could possibly give away a $50 shopping spree to someone when they refer two people. While you don’t need a lot of time or money to implement this type of strategy, you do need to make sure that you are consistently asking your customers for referrals.
Rewards or promotional programs are a great way to build loyalty among your current customers and continue to attract new ones. These programs often entice customers with special discounts or prizes, and they can help to establish your brand as the go-to place for certain products or services. Here are just some examples of ways that businesses use rewards: Discounts, Prizes, Loyalty Programs, Free Products, Exclusive Deals, Giveaways, etc.
Source: Starbucks via Google Play Store
5. Offering Value
Offering value to your customers goes beyond just being willing to give away free products and services. When offering value, you have to think about things from your customer's perspective. What would be valuable to them? How can you offer value to your customers without going overboard? Consider what will benefit each customer when you're thinking about how to offer value.
Source: Amazon
6. Keep it Personal and Show Your Appreciation
Try customizing your offers based on actual customer behaviour using analytics. Recognize regular customers by name. Show your appreciation with coupons, special offers, sneak peeks, or thank you notes. Invite them to forums or solicit feedback to show that you value their input.
Make a point of thanking your customers. Send them a thank-you note, give them a discount on their next purchase, or simply call them to let them know you're thinking of them.
It can be really difficult to find out exactly how much a customer likes your brand, but you can try thanking them for past purchases and see how they react. Whether you send them a quick email or even call them up to say thank you, doing so shows your appreciation for their support and demonstrates your commitment to customer retention.
7. Be Easy to Find
Make it simple for your customers to find you across all of your social channels. You can accomplish this by using a username that is both simple and consistent. Don't forget to use relevant hashtags.
Did you know that social media managers can help you not only gain new followers and customers, but also plan and implement strategies to keep your customers happy and loyal to you?
Final Words
Customer retention is critical to any business. Firstly, it's cheaper to retain a customer than attract a new one. Secondly, it can support business growth through strategic marketing campaigns. So, don't negate the value of marketing properly to your existing customers, don't just lump them into your all-encompassing tactics.
If you don't have a strategy in place, we would thoroughly recommend you find some time to think about putting a plan together asap, as you could be hindering your business expansion or contact us we will help you to improve customer retention with the latest strategies and explore your brand.
Also, go through the above strategies for customer retention and choose one that fits perfectly for your business.
