Improving Customer Retention
Converting a prospect into a client is always exciting and rewarding for any business. But the story doesn’t end here as retaining your consumer is another book altogether. B2B businesses usually find difficulty in retaining their consumers as they tend to overlook their existing clients in the thrill of new ones.
- Let us take a look at some strategies that could help your business retain their consumers optimally.
Before beginning with the advice, let us see some stats that show how the consumer retention pattern is observed across time and businesses:
1. The latest research on customer retention rate by industry shows that the media and professional services sectors currently have the best result of 84%. On the other side, the lowest retention rates are of hospitality, travel, and restaurant industries at 55%. (Statista)
2. Customer retention vs customer acquisition statistics suggest that it is more convenient and efficient to invest in converting an existing customer as the chances of success are 60-70%. By contrast, if you go for converting a prospect, the probability is much lower at 5-20%. (Textedly)
3. According to the Temkin Group, loyal customers are 5 times as likely to repurchase, 5 times as likely to forgive, 4 times as likely to refer, and 7 times as likely to try a new offering.
4. According to PwC, 73% of U.S. consumers say that customer experience is a critical factor in their purchasing decision. If they love a company or product, 59% will still walk away after several bad experiences, and 17% will walk away after just one bad experience.
5. Zendesk shows that, 51% of B2B companies avoid vendors after a poor customer service experience
All these stats show that retaining an existing customer is more beneficial, efficient, low cost and easier to convert than a prospect, which makes it imperative for B2B businesses to focus on their customer retention.
You need a solid customer retention strategy to keep your possibility of retaining customers as high as possible. While achieving a 100% rate is impossible, getting it close to 60-70% is easy and efficient. Here are some tips to maximise your retention rate:
1. Clear Expectations
Even though you want to increase your B2B customer retention rates, being overpromised will cost you more. Customers considering switching to your competitors if their expectations or perceived parameters are not met. Hence, it’s essential to be clear in what you can do, when you will deliver, and how you can make sure you keep your words and not disappoint them. The golden rule here is being transparent and straightforward in terms of communication.
2. Make Use of RFM Model
The recency, frequency, and monetary value (RFM) model is used to identify and market to consumer segments based on their transactional behaviour. The model is among the most used and potent ways to drive marketing automation, which plays an important role in customer retention.
You can use a scale of either 1 to 5 or 1 to 10 and assign every customer a score for how recently and often they purchase, and the monetary value of their orders. Each customer should have an RFM score. On a five-point scale, a 555 score would represent one of your best customers.
3. Build a Lasting Relationship
An important part of customer retention is to create an emotional dialogue with your customers. You can do this through integrated marketing channels which are designed to increase retention rates called customer relationship marketing.
It involves creating strong client connections in order to increase customer loyalty and brand affinity. It avoids the transactional nature prevalent in traditional and many e-commerce marketing activities, which prioritizes growing company revenue over improving the customer experience. This way, you not only retain your consumer but also build relationships that last for your company.