Ever wondered what impact does customer retention create on businesses? According to a survey, 65% of a company’s business comes from existing customers. Additionally, a 5% boost in customer retention can increase profits of the business up to 95%. Yes that’s what the extent of power existing customers have to influence a business. They can pull a dying organization from its lowest to the point of success. And they can help it sustain for its entire lifetime.
Hence, customer retention strategies are one of the key areas that successful business owners have been focusing on. And with the boom of subscription based business models, the need of these strategies has become important like never before.
There is no lack of competitors in any business you jump into. A slightest mistake in your service to the customer can cause them to immediately switch to another vendor. That time has gone when the job was considered to be done after the customer had bought the product. The providers no longer continue their hunt for the new buyers while ignoring the previously acquired customers. The cost of acquiring new customers has been already proven to be way higher than selling to the existing ones.
Having realized the importance of customer loyalty, SaaS businesses are focusing on building long-term relationships with the customers. Hence, it is not something new to talk about. What differentiates this article from the rest is the inclusion of the useful tips to enhance your strategies. Through this your customer retention objectives can be put into achievable actions. So let’s begin with them.
Build a high performance team
In most of the cases, sales representatives are the ones who manage the existing customers too. They are always on a look-out for further expansion of the business. It must be realized that to earn customer loyalty you must keep the interest of the customer before your own.
The customer should not be seen as just a buyer of your service. They are more of a part of a bigger ecosystem you are operating in. Hence, the success of the customer becomes equally important for you. It is to the extent of usability of your service to them.
So, to achieve that you need a dedicated team of resources to ensure continuous value addition to the customer. It thereby resulting in customer retention. That’s how customer success function using customer retention strategies comes into picture. And depending upon the size of your organization, you can hire a Customer Success Manager; Customer Success Executives; or even a Chief Success Officer at the level of C-suite executives.
Personalize your engagement model
Keeping a high-touch or a low-touch engagement model (based on your number of customers) is nothing new for an organization. What separates it from its competitors is how specific it can get in terms of serving different customers.
Customers don’t usually appreciate the off-the-shelf solutions provided to them by the vendor. But they would always welcome your solutions in their own business context. If you can show them how aptly your product adds value to their business then there is nothing like it.
Auto-generated emails can be time and effort saver. But receivers often overlook them because of irrelevancy. It can have a deep impact on creating the bond if you occasionally send them a personal note of appreciation. Showing your gratitude to them sometimes for doing business with you can add positive results. It would send them a message that you really care for them. It shows you are always available for any kind of assistance they may need in the journey of product usage.
Make use of the metrics
To know for sure whether your customer retention strategies are really working or not, you have to use metrics. You cannot simply go about doing your business without being able to quantify it. It has to be done in as many aspects as possible and customer success is one among those.
By using the metrics you will be able to show your contribution to the overall growth of the business. To begin with you must be able to measure the current health of the organization. And what greater indicator can there be then the monthly or annual recurring revenue (MRR or ARR). Over a period of time you must measure how much growth has been reported because of your efforts.
But what is specific to customer retention are the churn metrics like User churn rate or Net MRR churn. These churn rates should diminish as much as possible. That in turn would clearly indicate whether the strategies you are applying for retention are working or not. And if not then what needs to be changed.
Conduct timely customer surveys
Even though it is something additional you might be asking your customers to do. But the feedback you receive from them will always prove out to be immensely useful for your business. No matter how big, no matter from how many.
Through these surveys you may catch the pain-points of your customers. It will help you make necessary adjustments to your operations, product or customer service. Response received from one customer can be true for many others too. Thus, all that you will know from a receiver’s end will help you make improvements in your overall business.
You may also ask your customers about how likely they are to recommend your product to others. This is termed as Net Promoter Score. It is the clear indication of the level of satisfaction they are experiencing through your products.
These customer retention strategies are ones among the top and would always turn out to be beneficial if executed appropriately. Remember that the customer is a part of your business ecosystem. Hence, to retain customers you need to constantly show them that your product is adding value to their business.
Earlier it used to be a win or lose situation for either client or the business. Now the most feasible way to obtain customer loyalty is only through win-win strategy. And it is possible only through providing a greater customer experience. It is a long-term journey and reaps benefits only when the trust has developed. It gradually builds through the quality of service you provide to your customer.