10 Critical strategies to improve customer retention and increase profits

Once your company has successfully secured customers, it’s important that you take steps to retain them. Unlike customer acquisition strategies — which involve a company’s approach in getting customers to purchase or subscribe for the first time — customer retention strategies will help your company transform one-time customers into repeat buyers.

Customer retention strategies help companies improve upon existing relationships with consumers. Since an estimated 33% of American consumers will consider switching companies after a single instance of poor service, it’s important for your business to continue delivering on its original promises.

Once deployed, customer retention strategies often work independently from the company. More than 80% of consumers say they will take the word of a friend or family member over a company’s claim, indicating how important word of mouth can be to a customer retention campaign

With more than $62 billion lost each year due to poor customer service, customer retention has arguably never been a more important benchmark in determining a company’s long-term outlook. Both successful and struggling businesses can benefit from a focus on customer retention.

Consult the strategies below to tailor customer retention campaigns that will work to turn more one-time buyers into repeat consumers of your brand.

1. Use data to your advantage

Data is a critically important factor when it comes to improving customer retention. No matter the size of your business, using data to your advantage can mean the difference between year-over-year improvement, and the consistent loss of customers that keeps you from growing.

Every time a consumer performs a trackable action, they are providing you with valuable information. It’s up to each brand or business to collect this information and process it in a useful manner that will provide insight into customer behavior.

From customers’ purchase rates to average amounts of time spent on your website, customer data provides insight at every turn. Data plays a pivotal role in the digital transformation of a brand, as company leaders learn more about consumer habits and preferences.

2. Ask for customer feedback

There is a simple way for any company to receive the feedback they need, which can inform improved customer retention strategies: ask for it. Companies that request feedback from customers frequently receive honest insights. Feedback will help you learn about the quality of ongoing services, your company’s strong points, and any aspects of the company that could stand to be improved.

Solicit feedback from your customers, and pay specific attention to their responses. There are several different ways that your company can collect feedback from customers, including social media, email, website form, phone call, and user-review collection methods.

If your company does business directly with customers, you can also request direct, person-to-person feedback.

3. Face attrition head-on

Customer attrition, also known as “churn,” refers to the natural turnover of customers. No matter how great a company’s products or services are, some customers will naturally navigate away from your business in favor of other solutions.

It’s important that your company take steps to face customer attrition head-on. The loss of customers is natural for any business, and should be viewed not as a failure, but as an opportunity for learned improvement. If your company can learn from departing customers, through one or more of the above customer outreach strategies, you can work to prevent a similar loss of customers in the future.

Sometimes, you might find it in your best interest to end a relationship with a client. If a client is late on their payments, or disrespectful to the quality of services you provide, it might be a clear indication that your relationship should come to an end.

When you need to fire a client, it’s important to remember that doing so is okay. If your company releases a client, it can allow you more time to pursue clients that better reflect your values.

4. Target customers for upselling

Upselling is another effective strategy for improving your customer retention efforts. Companies that adopt a targeted approach to upselling can improve their customer’s brand engagement across the board. Through targeted upselling, you encourage customers to dive deeper into your products and services, and reach greater fulfillment. Especially in technology spaces, discovering upsell opportunities is critical to sustaining — and improving upon — a company’s growth trajectory.

If you’re an IT service provider, for example, you should take steps to segment your target market. This is one of the first steps toward targeting customers with more effective customer retention strategies. The more distinctly that a service provider can identify target markets, the more specifically they can target ideal consumers with retention campaigns that speak directly to the customer’s needs.

5. Reach out to inactive customers

Over time, some customers will simply become inactive. Without transitioning to another service provider, your customers will simply stop using your services. In other instances, customers will still affiliate themselves with your services, but will use them much less frequently. In any case, it’s important that your businesses continue to reach out to inactive customers and re-engage them in your services.

You can win back inactive customers in several ways. Some companies tailor specific “win-back” strategies to inactive consumers, featuring special promotions or discounts on services. Other companies prefer to leverage email marketing campaigns, social media outreach strategies, or even direct mailers to reintroduce a customer into their active consumer base.

6. Focus on transparency

No matter the scope of your business, transparency is always key. Your company should look to maintain transparent relationships with all customers, regardless of their purchase frequencies or totals. As a company representative, you can improve customer retention by ensuring that your company is always open and honest with consumers.

Maintaining transparency with your customers means keeping them constantly informed of any new business changes, especially any changes that will directly affect customer input. These changes can include alterations in service or product pricing, consumer touchpoints, account managers, or any other aspect that will change the way a customer interacts with your brand.

To improve transparency, reach out to your customers regularly.

7. Keep your promises

It’s important that your company keeps its promises to your customers. Oftentimes, customers will leave a company for another provider because the original company made a promise that they could not deliver on. When you keep your corporate promises to customers — especially if those promises were specific to individual customers — it shows consumers that you truly value them.

Companies with a demonstrated habit of breaking promises with consumers rarely find sustained success. Broken promises can have both short- and long-term impacts on customers. For example, companies that promise to keep a customer’s data safe — and then suffer a data leak or loss from any one of the most prevalent cybersecurity risks — can compromise the trust they’ve established with customers.

8. Use automation

Automation can improve so many aspects of your company’s operations, from employee communication to project management to customer retention. One of the most exciting new trends to define the marketing landscape, automation can improve customer retention rates when applied correctly.

Automation-assisted customer retention strategies include the aggregation and targeting of customer emails, as well as automatic social media posts during optimal times of the day. Ultimately, automation makes it easier for your company to improve outreach efforts, which have a large role to play in retention rates.

9. Incorporate personalization

Personalization is continually important in many relationships between customers and companies. Any time a customer feels as though a company is making a specific effort to retain them, it sets the stage for a sustained, successful relationship between customer and company.

Fortunately, you can incorporate personalization into a variety of company strategies. Instead of impersonal email blasts, automation will help your company tailor outreach emails and newsletters specifically to individual clients, including information like the customer’s name, recent purchases, and account data to help them feel valued.

Other personalization strategies include person-to-person customer support, which helps customers feel individual issues are being appropriately addressed. In addition, personalized online thank-you pages can feature links to content the customer might find relevant, or up-to-date information on product arrival.

10. Prioritize the customer experience

Ultimately, your company should prioritize all aspects of the customer experience. Often, this means ensuring continued customer satisfaction through a streamlined online user experience. When it comes to IT support, managed service providers can yield real dividends in improving customer satisfaction rates.

If your company builds responsive customer portals, you’ll improve all aspects of your customer communication, further empowering users who stay loyal to your company. You can also enhance customer experience through a smooth onboarding process, including network discovery services that provide instant scans and recognition of all user devices.

Offboarding is also paramount when you’re working on retaining customers. Even if a customer chooses to end their service contract with you, preserving your relationship with them means the possibility for future business. From the beginning to the end of your relationship with a customer, prioritizing the customer experience paves the way for improved customer retention.