Customer Retention Strategies to Increase Sales | Sales Layer

Customer Retention Strategies to Increase Sales

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You’d think any marketer would jump at the chance of a strategy that costs 25 times less while providing twice the conversion. The fact is, it’s much more economical and profitable to keep loyal customers, yet businesses are obsessed with attracting new ones.

What is customer retention?

Customer retention is a strategy applied by a brand or company to hold onto its buyers for a given period of time.

In a customer retention plan the goal is to keep a buyer or user for as long as possible or for an optimal period. Therefore, it differs from the acquisition of new customers and the search for potential leads, but is almost more important than these.

Any customer who has already purchased from your brand even once, can become a target for retention and while this may seem like an intrusive tactic that will tire your customer, it's not.

You'll need to invest much less money and your results may be even better than expected, since everyone’s looking for a brand they can trust.

Some figures about customer retention

You're 40% more likely to sell to a past customer than to gain a new one.
Loyal customers spend up to 30% more than new leads.
The probability of successfully selling to a past customer is almost 70%, while sales success among new leads ranges from 5 to 20%.
Loyal customers are 50% more willing to try a new product of yours, than would new customers.

How to build customer loyalty

In the cycle for keeping any customer three key phases can be distinguished:

Attracting your customer: The first step is to attract the attention of your potential customer.
Guiding your customer: Once a customer shows interest, accompany them up till their first transaction.
Growing with your customer: After getting your customer to buy your products or use your services, focus on keeping their initial attention.

Challenges for brands to retain customers

Consumer trust is eroding

Users are feeling less well informed and actually confused as to the reliability of their information sources. Buyers continue to distrust brands and their advertising messages, leading to more reliance on:

Word of mouth
Recommendations by other shoppers
Articles in the media
Analysis reports and reviews

Customers are becoming more impatient

Consumers nowadays demand an immediate response, which is defined by many as 30 minutes at most.

Customer acquisition is becoming more complex

Attracting customers is becoming increasingly problematic, leading to higher marketing costs while staying in the Google spotlight requires more content optimization tasks.

How to measure your customer retention rate

The Customer Retention Rate (CRR) measures the percentage of customers retained over a given time period. The formula for calculating your CRR is as follows:

CRR = [(E-N)/S] x100

Where:

S = the number of customers at the start of that period
E = the number of customers at the end of that period
N = the number of new customers during that period

Customer loyalty strategies

Analyze your purchase order cycle

Work closely with your sales and marketing teams to share information and understand customer profiles.

Provide good product content

Good product content (descriptions, technical data, images) saves time for shoppers and adds value.

Build trust in your shopping process

Choose trusted marketplaces and ensure good communication and web security in your sales channels.

Look after your brand image

A favourable brand image helps form a good opinion of your products.

Aim for a top notch customer service

Attentive customer care will lead to happy and satisfied customers. Trends in conversational commerce are crucial for maintaining direct communication with users.

Create a loyalty program

This option is not universal but sought to gather your most loyal customers and encourage repeat custom.

Customize your retention rewards

Implement customized strategies such as cross-sell and upsell suggestions tailored to individual customers.

Conclusion

The magic formula for retaining customers loyal to your brand and products: attract, convert, persuade and seduce. Sustaining excellent product content is essential for this process.