How to increase customers' retention with a product enablement platform
Updated: Jul 7, 2022
Every company works so hard to reach and attract new customers. It then saves no effort in trying to maintain customer loyalty. Finally, all companies do their best not to lose those clients in order to keep gaining revenues, profits, and market share. Churn, the loss of customers' business, is one-word companies don't like to hear.
Customer retention, therefore, is a constant work-in-progress, by which companies actively try to keep each and every customer that has already purchased one of their products at least once. Special emphasis and a distinctive KPI is determined and managed in order to rate and understand customers' retention.
What is a customers' retention rate?
In order to avoid guesswork and gut feelings, companies usually employ the objective measurement of customer retention rate. The accepted equation is:
Retention rate = ((CE-CN)/CS)) * 100
The variables are as follows:
CE = The total number of customers by the end of a specific period
CN = The total number of new customers the company acquired during that period
CS = The total number of customers at the beginning of that period
Just to illustrate, let's assume that a company started a quarter with 100 customers. During those three months, the company lost 20 of them but gained 40 new ones. By the end of that quarter, the company had 120 customers in total.
Placing those numbers in the above-mentioned formula looks like this:
120 – 40 = 80 (Total customers minus total new customers)
80/100 = 0.8 (The result of the above divided by total customers when Q began)
0.8 * 100 = 80 percent
So the company maintained 80% of its customers by the end of that quarter. Determining if 80% is a good or bad customer retention rate depends on the company's position in its market. Customer retention metrics and each company's analysis of its situation will determine what the company needs to do next. Any result below 100% calls the company to improve customer retention.
Why is customer retention important?
No company wishes to lose a customer so having a high customer retention rate is extremely important. Studies such as this, it is 6 to 7 times more expensive to acquire a new customer than to retain him. Existing customers do not require as many resources as new customers. A company can save lots of money and resources in marketing and sales as well as in customer training and onboarding. Customer satisfaction leads to more revenues and to them referring other customers to the company. Good word of mouth from existing customers can be worth a lot.
What are the main factors of why customers leave a product or a company?
When customer expectations are not met, they may choose to leave a business. If they are not happy with the product, the service, or sometimes because of both of them, they will seek other alternatives in the market. Among the top reasons why your customers leave your business, customers may think that the business does not treat them as individuals or that the products or services are not attracting them anymore. Customer complaints may begin to register on review boards and social media leading some customers to leave the business and signal to the company that there are problems to track and resolve.
A company must then regroup and evaluate its investment in customer loyalty. It must find ways to encourage customers to come back and visit their products and create customer loyalty all over again.
Strategies to increase customers' retention
After evaluating the customer retention strategy and deciding on the company's customer retention programs, measurements can take place to show how such efforts resulted and whether the plan to increase customer retention succeeded.
Companies may choose any or all of the following strategies when they aim to improve customer relationships and as they invest in their customer loyalty.
1. Win them by conducting a great onboarding process: First impressions are very important and may last in the customers' minds even long after their first encounter with the product or service. It is not only the product itself but the full customer experience which may leave a lasting impression on the customer. Smooth and as personalized an experience as possible may stick with your onboarding customers for years to come.
2. Analyze customers' feedback
Tracking and monitoring customer feedback may pinpoint what they are happy about and why, but also explain whatever problems they see with the product or service. Once the customer feedback is collected and analyzed fully, the company can start planning and implementing its customer relationship management. It can respond in real-time to customer complaints as well as plan improvements to its product or service.
3. Use marketing to keep your products on your customers' minds
Customer retention marketing calls for several different actions which a company can perform in order to maintain its products in its customers' minds. Updating your customers via email and letting them know what your company is up to with regards to its products and services is always an option. Announcements and special offers on social media may work too. Campaigns, even in areas not directly related to the products but such that are showing social responsibility can be a good idea.
4. Reward customers' loyalty
Customer lifetime value is something that every company must prepare for, and the first customers to be considered for that manner are the ones most loyal to the company. Showing them, as well as to the rest of the clientele, that loyalty pays off, can serve as an important aspect of the overall company's strategy.
For lasting customer relationships, reward your loyal followers with special savings and bonuses after they place several orders. Companies can and do employ loyalty programs which guarantee a customer a certain gift or value every predetermined period. Also, companies may reward referrals from current customers to new customers.
How Affogata can help you improve your customer retention rate
Retaining customers is always a challenge. However, once companies invest resources in order to keep their customers loyal to them, the rewards to the bottom line can be significant. And customer retention begins with customer feedback. Affogata offers a wide-ranging platform that tracks, monitors and analyzes customer feedback in order for the company to evaluate and improve upon its products and services. Among them one can find the following:
Real-time constant customers' feedback tracking and analysis
Affogata's product collects customer feedback from many different channels over the open web, including companies' and competitors' websites, review sites, social media channels, and many more. The data is then analyzed so that the company receives a full picture of what its customers think about its products and services. It can then make actionable insights and better plan future business moves and go-to-market decisions.
React in an "all-in-one-place" platform
Customer engagement is performed better when a company's representative or team can immediately react to all comments and customer feedback in one place. Affogata brings in many customer reactions from many different platforms all into one place, making it easier to respond to every mention quickly.
Brand sentiment score and analysis
Analysis of real-time feedback from many communication points results in Affogata showing the company what the overall brand sentiment is now and also how it compares to previous time periods and to the sentiment of the company's competitors.
Negative mentions categorizing and analysis to improve your weak spots
Complaints and negative mentions are tracked, categorized according to volume and are presented to the company so that it can better react to wherever its problems are. The company is then able to act quickly to "put out fires" and fix bugs, service problems and more.
Alert system to minimize bugs and improve customers' satisfaction
Affogata also offers a unique system where customer complaints result in sending alerts to the company in real-time and with specific details as to what the problem is and where it occurred. Such alerts enable the company to take care of the problem quickly and efficiently while also avoiding a possible PR crisis when such issues are not dealt with.
For more information, please visit our website and book a demo with us: Affogata.