5 Reasons Your Business Why Should Invest in Customer Retention
“Don’t make a sale, make a customer.”
This is one popular business quote that every successful entrepreneur will agree with.
In this internet era, customers are spoilt with countless options. A simple online search will help them find an alternate product or service. In other words, if you are running a business, losing your customer to competition takes less than a minute.
That makes customer retention extremely crucial to the long-term growth and sustainability of the business. Whether you are a small scale business that deals with customers in person or an online business that counts on virtual interactions, customer interaction is crucial in all aspects.
What is Customer Retention?
In one simple line, customer retention means retaining your existing customers from churning. Customer retention rate is the metric used to measure how successful a business is in retaining its existing customers from the beginning of a period until its conclusion. A positive and higher customer retention rate is a good sign of business growth, great customer service, and also customer loyalty. If you think new customer acquisition is a better strategy than customer retention, think again. There are also several benefits to customer retention that no business can turn a blind eye to.
Here are 5 reasons why your business should invest in customer retention now than later:
5 reasons why your business should invest in customer retention:
1. Saves costs
Studies ¹ suggest that it costs 5 times as much to acquire a new customer than to retain an existing one. In fact, 60% to 80% of customers tend to go back to the same company to do business that initially satisfied them.
Source The primary benefit of customer retention is that it saves costs incurred for marketing, customer onboarding, maintenance, and even after-sales support. Let’s take a closer look at how it works.
Every new customer needs an onboarding journey that will acquaint them with the product or your service process. That calls for trained and experienced resources and their valuable time. Hiring and maintaining onboarding specialists will be an expensive affair if customer acquisition rate is higher than customer retention.
Since retained customers do not need much in terms of transacting with the business, it helps reduce the reliance on onboarding specialists. Even if they are in need of support, it would be minimal in nature and can be taken care of with an intelligent live chat tool . In fact, such a live chat tool can also act as a substitute for new prospects landing on the website or existing customers looking for instant support.
Marketing is not a spray-and-pray activity. It needs a strategic approach, long-term planning, and dedicated resources to make it work. Also,...