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7 Proven Ways To Increase Customer Retention Rate

The key to the success of your business is retaining your existing customers by being loyal to your customers. To do that, you need to focus on the customer retention rate.

High customer retention rates will raise your sales growth rate, improve revenue, and also reduce your marketing campaign.

Besides, The acquisition of a new customer is 5 to 25 times more expensive than the retention of an existing customer anywhere.

For this, you have to put more emphasis on the strategy for increasing the retention rate.

But, How do you do to increase customer retention rate?

Well, in this article we will walk through seven proven ways to increase your customer retention rate and build a loyal customer base.

So, let’s begin!

What is Customer Retention Rate?

Customer retention rate is a key performance indicator of your business which calculates how many customers make a repeat purchase over a given period. It reflects a company’s capacity to generate interest about your service within a dynamic environment.

The aim of a customer retention program is to retain your customers and encourage them to stay as long as possible with your business.

To track the rate , you have to use the following formula as,

Customer Retention rate = [(Number of customers at end of period) – (New customers acquired during that period)] / (Number of customers at the beginning of period).

7 Proven Ways To Increase Customer Retention Rate

The customer retention objectives and strategies may vary by business to business. Here are the seven proven ways to boost customer retention rate for any type of business,

1. Build a Loyalty Program
2. Stay Honest With Your Customers
3. Pay Attention To Customer Support
4. Collect Customer Feedback
5. Give Social Proof And Reward For Social Shares
6. Use Referral Bonuses
7. Maintain A Communication Calendar

1. Build a Loyalty Program

Building a loyalty program is one of the proven ways to retain your existing customers and increase customer retention rate. A Loyalty service encourages consumers to shop in return for attractive incentives. This also makes customers feel respected and appreciated.

Take an example, you can give a discount or special offer for your existing customers. Or, you can provide a discount from the second purchase for your customers. These kinds of incentives help you keep preferring your business among your competitors.

You may also build your loyalty plan by introducing a point system, such as sharing your content on social media or subscribing to your service, recommending to an individual within their network etc. These type of rewards keeps your clients engaged and willing to keep using your website.

2. Stay Honest With Your Customers

For any type of business, success lies in how much you are able to keep your promises that you make to your clients. You retain your customers when you take their trust and satisfaction. That’s why being honest and transparent is another way to increase your customer retention rate.

The most important thing you have to remember is that you must be honest when any customer takes your service. 

For example, If you take some hidden charge be clear with that before buying any product. Sometimes this type of experience increases your cart abandonment rate and also loses the trust of your service.

3. Pay Attention To Customer Support

As we realize, the customer retention rate is mainly related to customer satisfaction. 

To get your customer’s trust and satisfaction, you have to provide effective customer support. You have to engage with them to remind them that you are there for their needs. To engage with your customers, you can activate a live chat system or private messaging system to respond immediately. 

More importantly, when you get any complaint about any product, don’t ignore it. This is the highest priority for you to stay polite when dealing with complaints and solve their problems.

Moreover, To increase the retention rate as well as customer satisfaction, you can make a forum or page where customers submit their complaints or query about your service. This will help you to get more customers in the long run.

4. Collect Customer Feedback

Having Customer feedback on your website will help your client to analyze your business such as what are they providing, how’s the service and how’s the product quality. Taking it in this mind, you can give an option to provide feedback and rating about your service. With this feedback, you will identify your failings and fix your flaws. Not only this but also you can also get more attached to your customer and get to know what they need from your service.

So, it’s the key that can give you insights into the current customer’s satisfaction level and identify your business growth.

5. Give Social Proof And Reward For Social Shares

Having social proof of your product or service is now one of the popular ways for not only getting new customers but also keeping your existing customers in the long run. Using the social proof on your service shows that how many users take your service as well as satisfy your product.

You can also reward (offer, discount) for your most loyal customers when they share your service and products on social. With this strategy, you can engage with your clients through social media. It also encourages them to share their thoughts on social media about your service for getting the reward.

6. Use Referral Bonuses

Another way to increase customer retention rates is to use referral bonuses and discounts. In this way, you give an option to your existing customers who refer your product to their network and can take a discount, gift card, or bonuses. 

These types of incentives are more encouraged by your customers to take the return gift. It also helps to promote your business by sharing the referral code. Moreover, you are obtaining new customers and increased customer loyalty by this way.

7. Maintain A Communication Calendar

The last but not least strategy to increase customer retention rate is to maintain a calendar to communicate with your customers. This chart tells you when you reached out with your customers last time.

It not only helps to communicate with your existing customers but also those who have not interacted for a while. By this, you have a chance to re-establish a relationship with those customers.

In addition, through the communication calendar, you can also launch your new product, or some special offer, discount with your customers.

Conclusion

No matter what type of business you have like big or small, Your customers are the most important part of growing your business and sales. So, you have to put more effort to understand your customer’s needs.

Hopefully, this article will help you to understand the ways of increasing your Customer Retention Rate. To track your e-commerce business performance you can check our 10 important Ecommerce Metrics which play a key role in your business strategy, result, and revenue.

To add more, you can check our complete e-commerce solution to track, control or manage your files easily.

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