August 4, 2015 | Authored by: Vindicia Team Blogs
5 steps to improve customer retention
Customer retention greatly improves profits, so it's important to spend time focusing on the customers you already have. According to the Harvard Business School, when a company increases their customer retention rate by five percent, they can increase profits anywhere from 25 to 95 percent. The same research found attracting new customers costs 20 to 40 percent more - depending on the industry and market - than trying to keep the ones you already have. Those two stats create a strong case for improving your customer retention.
Here are five steps to make customer retention efforts more effective:
Step 1: Track customer retention
Subscription based business needs to be tracked so you can easily see how you're doing. While tracking subscriber information is important for financial purposes, it's also very important for customer retention. You need to know how many subscribers you're gaining and losing. Look for seasonal or economic trends and adjust your business accordingly. While seasonality isn't as big a deal for subscription based businesses, it is still important to note. The more you know, the better you'll be able to adapt as necessary.
"Every shipment you send can be a way to connect with the customer."
Step 2: Listen to subscribers
You need to listen to what your subscribers have to say. Without them, you wouldn't have a business to run, so it's important to make sure that you're paying attention to the things your customers say about your products and services. Try to engage them on social media, through email campaigns, voluntary surveys, review boards and more. You should look at the opinions of current subscribers and former subscribers to try to find a way to make your business better. Every shipment you send can be a way to connect with the customer and try to get information about their experience with the business. Include questions about shipping options, payment processes, product offerings and customer service.
Step 3: Reward loyal customers
While you're tracking customer retention and analyzing the responses you're getting from subscribers, it's important to not neglect your loyal customers. Customers who have had subscriptions for a while and are faithful to your brand deserve a reward. By giving your customers something you're ensuring they will stay happy. Special programs can have a dramatic affect on customer satisfaction and your business as a whole. According to Entrepreneur, online retailers saw a dramatic increase in their revenue after increasing customer rewards programs.
Step 4: Reduce pain points
Once loyal customers are taken care of, you can put what you've heard and the information you've been tracking to work. Through your research, identify what the common pain points are for most of your subscribers. After those pain points are identified, you can start eliminating or reworking areas of the customer experience that cause negative reactions. Common pain points include shipping problems, long checkout processes and insufficient payment options. While some things will be easy fixes, others may take some time.
Step 5: Communicate with customers
Making changes to increase customer retention should help with customer retention but you have to show customers you're making changes. If you're not communicating with your customers, some may leave before the changes can be made.Regular subscriber updates can be a simple way of communicating changes to your customers. This can be a simple monthly email notifying customers of all the changes that have been made or of ones that will come in the future. By showing your customers their opinions matter you'll build trust and loyalty.
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