Increase Sales by 95% with Customer Retention

There had been times when customer retention wasn’t as much of a priority like these days. Those times are now gone. Why? Business owners and marketers have started to realise that the cost to acquire a new customer is increasing, perhaps due to competitive and saturated markets. Bain & Company´s research has shown that increasing the customer retention by just 5% can make a huge impact on your business [1].  That means you can boost your profits by 25%-95%.

A Cross-Channel Marketing Report states that 82% of companies agree with that customer retention is cheaper that customer acquisition itself [2]. It also adds that despite this figure, the majority of marketers still tend to focus on acquisition. Why? We don’t know exactly. A fair assumption might be that we are accustomed to wanting more customers, and ignore the ones we already have? Or perhaps we lack the right tools or education? Customer retention can be understood as a lifetime value of a customer or a potential to achieve a profit from the customer as long as they are bound to the company´s brand.

Further research, conducted by American Express shows that 66% of customers have no problem in spending 13% more on a product when they believe the company provides top-notch customer service. Additionally, about 75% of customers are willing to spend more, if they had a positive experience [3].

So what does that tell us about customer loyalty?

Having a long list of loyal customers is the holy grail of your business because you can always expect a steady stream of revenue. Especially knowing the 80/20 rule – whereby (plus or minus) 20% of your top customers contribute to 80% of your revenue! So, customer retention should be your top priority. Good customer retention is crucial for the growth and expansion of any business. Customer retention can significantly improve your sales and profit. Many business owners are wondering how to increase sales and it seems that the answer was underneath your note all this time. The simplest way to do this is with customer retention!

How to increase customer retention?

We will start by analyzing the process of customer retention. In many cases, business owners and managers think that providing services or products that meet customers’ requirements is enough to keep their customer coming back for more, but that’s not the case. Customer retention is much more complex and involves different activities. First of all, you should enhance customer satisfaction by delivering reliable customer service and product quality. Next, you should motivate every client to keep using your products (or services). Finally, find nifty methods to encourage your customers to recommend your business to others.

While we are talking about this, we should mention customer satisfaction in e-commerce as an example. To improve customer satisfaction, many e-commerce websites are using the same tactics. They are offering free toll numbers, 24/7 live chat support, creating help pages, offering different payment options and few other things. The fact is that companies that are practicing these things manage to get better customer satisfaction and ultimately better overall customer retention and loyalty!

Obviously, customer satisfaction is not the only thing that can improve customer retention.  For instance, you should remember that it’s not all about your products/services, it’s about providing help to your customers. So you should be able to provide useful information to them for free (maybe in a blog section on your website, or a forum). In addition, it is a wise move to stimulate direct action by adding a call to action buttons and boxes in the right place. Finally, you can also find a suitable way to reward loyalty. A simple gift should be enough to increase customer retention.

Increasing sales with customer retention

So, if you want to increase sales with customer retention, you must take care of a few things. To start with, you should resolve any customer issues or disputes promptly. Keeping your e-commerce website or any type of business free of hassles is one way to boost sales and keep your customers coming back. As we said before, you must maintain customer satisfaction at a high level all the time too. In the end, feel free to ask your customers for referrals and don’t hesitate to award them for their activity.

We hope that this article will help you understand the importance of customer retention and how it affects sales.

[1] http://hbswk.hbs.edu/archive/1590.html

[2] https://econsultancy.com/blog/65872-15-fascinating-insights-from-econsultancy-s-2014-reports/

[3] http://about.americanexpress.com/news/docs/2012x/axp_2012gcsb_us.pdf

10 Simple Tips to Entrepreneurs and Startups

Tips to Entrepreneurs and Startups

  1. Perseverance is the Key

Steve Jobs got kicked out of Apple. While J.K. Rowling was writing the Harry Potter book, her life was a self-described clutter: she was going through a divorce and her only source of revenue was government aid and living in a tiny apartment with her daughter before building her millionaire brand. Henry Ford went broke five times before he founded the unbeaten Ford Motor Company. Bill Gates was unsuccessful with his initial business, Traf-O-Data.

Reading anecdotes about successful entrepreneurs is undoubtedly helpful. One thing that is universal amongst most successful entrepreneurs is that they were preserving, and if you want to be a thriving one you have to be preserving too.

  1. Take Risk

Successful entrepreneurs are frequently taken as having an almost unhealthy taste for risk. Risk is a necessary thing to take when you are dealing with a startup. For example in the above examples, most of them took huge risks. Every successful entrepreneur in history took risks and that is the reason why they succeeded. After all, the courage to take risks is what differentiates successful entrepreneurs from the ones that do not do well.

  1. Don’t think you’re the smartest person in the room

It’s easy to convince yourself you have all the answers to any problem. It is crucial for entrepreneurs to have the kind of open-mindedness that acknowledges you don’t have all the answers, and therefore only then can you strive to find solutions that are even better and efficient then your first instinct, and you can ask others for ideas too. Therefore, if you ever want to be a successful startup, you need to at least develop one mindset that is to not think yourself as the smartest by comparison with others as well as yourself.

  1. Make something people want

The biggest mistake an entrepreneur can make happen is when you make something the market doesn’t want. If you do everything correct except for this single thing, you will be unsuccessful. But if you do everything wrong and you still make something the public wants, you will most likely do well.

  1. Focus on quality

Spend all your money in the excellence of the product, no matter how much of a lean startup you are. That means to develop the best product there can be, and ultimately that will lead to your product being loved by the general public and lead to your startup’s success.

Tips to Entrepreneurs and Startups

  1. Hire the best people

Next one of our tips to entrepreneurs and startups has connection with hiring. What this means is to hire the best people you can find for the specific jobs, because after all it does not do to have a large capital and instead of investing on human capital you spend it else wise.

  1. Focus on the smallest feasible product

It means to not start off with the greatest aim and goal in mind, instead don’t try to do too much. Everyone has grand ideas, some of which can come after wards but ask yourself what is the simplest thing you can build that has even a little value in it.

  1. Train your team in the best manner

The most efficient way to engage your team is to continually train them. Train them by sending them to specific workshops, hold training meetings, anything that helps them develop themselves.

  1. Listen to the customers

This means to ask from feedback and suggestions from the customers, and perhaps study them to find out what your product excels in and what it lacks. And then improve it accordingly.

  1. Use Technology to your benefit

Whenever software can bring down the expenses of the physical world, make use of it. With the technological revolution, technology can really replace many of the menial tasks a startup may have … for the better. Therefore use the latest gadgets and software to improve the work flow.

 

If you will follow these simple tips to entrepreneurs and startups, there will be a higher chance for you to be succesful.

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