Customer retention is a commonly used phrase in business, and that is probably because it is such an important principle. Retaining customers turns first-time customers into repeat customers, and it turns repeat customers into long-term customers. This principle is extremely important if you want to effectively grow your business, and this is vital for any type of business. Here are three things you should understand about customer retention.
Why It Is So Important
With a lot of competition in business today, every customer you have is important for your company's success. Landing a new customer can be a difficult task, and that is why focusing on retaining your customers is so important. Your business will not grow steadily if every customer you have is a first-time buyer. On the other hand, imagine how your company could grow if you continuously add new buyers to your mix and keep all the customers you currently have.
A recent study concluded that 80% of the income your business will receive in the future will come from only 20% of your current customers. Another study showed that you could potentially increase your company's profits by 95% if you can find a way to increase your customer retention level by just 5%.
If you lose any of your customers, especially some of the big ones, you could be directly damaging the future profits of your business. It is much easier to retain your current, steady customers than it is to develop good relationships with new customers.
New Customers Are Also Important
Retaining existing customers is vital; however, you should also understand that adding new customers to the mix is also important. Your existing customers may not be around forever. Because of this, you will also need to focus on finding good methods that help you find new customers that will turn into repeat customers. Finding the right mix can be difficult, which is why you will need to have strategies for both goals.
Strategies That May Help You Accomplish Your Goals
Whether you are trying to retain your existing customers or find new ones that will turn into long-term customers, your strategies may be similar. Here are some methods you could incorporate into your business to help you achieve both goals:
- Keep up with current trends – A business that does not keep up with current trends may have a hard time staying above water. When you focus on keeping your products and services up-to-date and trendy, you will keep your business alive. To do this, you will need to periodically evaluate the trends in your industry and make the necessary changes so you can provide your customers with the goods and services they want and need.
- Be personal – Sending personal emails or letters to your clients is a great way to let them know they are valued. Things like this can help improve the relationship you have with your customers. When they feel close to your company, they might be more prone to continue doing business with your company.
- Improve customer service – One of the most important steps you can take to retain your customers is offering excellent customer service. As you try to improve your customer service, focus on making it easier for your customers to place orders or ask questions. Hiring a live answering service company is one of the best methods to use for this. This would allow your customers to reach a real person at any time of day or night. The operator they reach would then be able to give them the information they need. Contact a company like Security Services Northwest, Inc for more information about this kind of service.
Customer service is a vital part of every business, and it can either hurt or help your business. If you would like to learn more about the importance of customer retention, you may want to begin by contacting a live answering service company. They can help you learn more about the strategies you could use to improve your customer retention rate.