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Client Retention Strategies
What’s the difference between a “client” and a “customer”? They mean the same thing; client retention strategies are essentially the same as customer retention strategies. Sometimes, “client” can carry with it the implication that they’re a little more permanent than a customer – but the goal is to make sure that all customers that can be retained are retained.
Customer retention differs significantly depending on industry. Customer retention strategies in service marketing are going to be significantly different from customer retention strategies in automobile sector. This is down to how frequently customers are expected to come back, how big ticket the items are, and how aggressive the competition is.
Businesses interested in improving upon their client retention strategies should consider all their options. A customer retention strategies PDF, customer retention strategies slideshare, or customer retention strategies PPT may be a good jumping off point, but it always has to be tailored to the company and its industry.
Many organizations today are approaching their customer retention strategies in CRM. Customer relationship management solutions make it possible to track and analyze customer relationships, making it possible to identify areas in which the company may be failing to engage.
There are both negative customer retention strategies and positive customer retention strategies. Consider this in terms of client retention strategies real estate. Negative retention involves accepting that a certain level of customers will leave; positive retention strategies involve working towards ensuring that a certain level of customers stay.
Customer retention is incredibly important. Retaining customers leads to long-term growth and improved revenue. It’s cheaper for customers to be retained than it is for them to be acquired. Moreover, customers only leave when they are unhappy. Higher levels of retention means that the company is offering its customers everything that they are looking for. Lower levels of retention will indicate that the company’s customers are interested in other options enough to jump ship.
But it isn’t enough to just retain customers. Companies also need to know which customers to retain. By focusing on the highest value customers, companies are able to increase their retained dollars, not just their retained customers. All this can be very complex. Today’s next-generation technology makes it easier for organizations to identify their highest value customers and work to retain them.
Customer Retention Definition
Let’s take a look at the general customer retention definition. What is customer retention, exactly? Customer retention relates to the amount of customers the business is able to retain over time. You can go through a customer retention questionnaire PDF or a literature review on customer retention PDF for more information, but the general definition of customer retention is simple. The strategies behind it are more complex.
First, customer retention is different by industry. A realtor isn’t likely to have significant customer retention; customers don’t purchase homes or sell homes very frequently. A lawyer is likely to have high customer retention; they will have retainer clients who come to them year after year. Companies need to define and analyze customer retention based on their industry and size.
The basic customer retention algorithm is: ((FINAL_CUSTOMERS-NEW_CUSTOMERS)/INITIAL_CUSTOMERS) x 100. In this algorithm, “FINAL_CUSTOMERS” is the amount of customers at the end of the period, and “INITIAL_CUSTOMERS” is the amount of customers at the beginning of the period. This shows how many of the customers that have been brought in have been retained.
Comparing customer retention period by period shows a company whether it’s growing or shrinking. It’s important not only for companies to be growing, but also accelerating. Companies should be doing all they can do to grow their customer base. In the case of a realtor, they may not be keeping many of their customers. However, they do need to be gaining more customers than they lose.
Thus, customer retention and client retention can be mitigated by higher levels of acquisition. But churn (the amount of customers lost) still has to be considered, because customer acquisition is more expensive than customer retention.
Customer Retention Examples
Sometimes, looking at customer retention examples is a better way to understand customer retention than a customer acquisition and retention PPT. Customer retention strategies case studies and customer retention company examples can give a better overall picture about how retention works and which strategies are successful.
- Creating customer loyalty and convenience through apps. Starbucks has managed to make itself the easiest to use coffee house, through its robust mobile app. Customers are able to easily check in on coupons and loyalty points, can put their orders in to go, and can find a Starbucks wherever they are. This encourages customers to go to Starbucks whenever they want coffee or a snack, rather than a competitor. It’s exactly what customer retention is meant to do.
- Developing a complex, internal ecosystem. Apple is famous for creating an ecosystem that demands that customers continue purchasing their projects. Their phones, tablets, and laptops all sync with and work with each other, which makes it more appealing for customers to have an “all Mac” or “all PC” ecosystem. While this makes it harder for them to pull over people from the PC crowd, it makes it more likely they’ll retain their existing customers.
- Leveraging subscription-based systems. Amazon, in particular, has created a very stable customer base through subscriptions. Amazon is a subscription itself, but that also includes Amazon Music, Amazon Streaming, Amazon Now, and more. Amazon delivers useful products to its customer base, and therefore it has static membership fees coming in.
Once an organization has viewed some customer retention examples, they can research in a variety of ways. A customer retention PPT download or PDF will give you more information about how to get started.
Importance of Customer Retention
So what are the benefits of customer retention? There are multiple factors when it comes to the importance of customer retention.
Foremost, it’s an important indicator of the general health of the business. If you see your retention going down, you know you need to adjust your strategies. Your organization has to improve upon its client processes, because it’s starting to lose its business.
Second, high levels of customer retention are excellent for acquiring investments. Investors want to see good customer retention, because it means that the company is growing and it’s going to be successful.
Finally, customer retention shows whether customers themselves are happy. With high customer retention, you’re more likely to get positive word-of-mouth. With low retention, you’re more likely to have customers that aren’t upset, or disappointed.
The more information you have about your business, the better. Analyzing your customer retention gives you a significant amount of input regarding what you need to improve, and what’s working for your business.
Customer retention is one of the most important metrics for any business to track. But it cannot be over-emphasized that customer retention is also industry-dependent. Companies need to compare their customer retention with other companies similar to them, as well as their own past performance. A company that provides professional accounting services cannot compare itself to the retention rates of an eCommerce store, and vice versa.
For more information, you can read a benefits of customer loyalty PDF, or a benefits of customer retention PDF. This will show you how to write a presentation on customer retention that the C-suite can understand and get on board with. If you can run through an importance of customer retention PPT, you’ll be able to more accurately describe the importance of retention and it’s strategies.
Customer Retention Tactics
What are specific customer retention tactics? If you’re wondering how to retain customers who are leaving, you need to start with your business and your industry. The scope of customer retention is going to change depending on what your industry is like. From there, a customer retention strategy template can help – but a client retention template can only go so far.
Here are some examples of classic customer retention tactics:
- Mailing lists. Sending emails to customers on a regular basis can encourage them to come back, especially within the eCommerce market. But even other industries may engage in these tactics. Accountants may send mailers to customers before tax season, or car servicing companies may send out reminders regarding their customers’ repairs.
- Coupons. Sending coupons along with purchased products encourages customers to make a purchase again, while also making them feel valued. By putting an expiration date on the coupon, it also encourages customers to make a purchase as quickly as possible, thereby increasing cash flow.
- Promotional seasons. Promotional seasons and limited sales get people excited. They want to get a deal, and they know that time is running out. With the right advertising, promotional seasons can bring customers back.
- Loyalty rewards. Loyalty rewards, once accrued, encourage customers to make another purchase in order to use their loyalty points. This encourages customers to keep coming in, because the experience has been “gamified.” Customers will spend more time thinking about and interacting with the business.
- 24/7 support. Many customers leave because they can’t get the support they need. Not only can a company provide 24/7 support, but they can also provide support through multiple options: text, phone, email, and more. If a customer encounters problems, they’re more likely to contact support rather than just cancel their accounts.
- Customer engagement. Connecting with customers at certain points can encourage them to interact with the brand and potentially reveal any issues they’re experiencing, before those issues cause them to terminate. An ABM platform, like Terminus, can help identify times when customers are more likely to leave, and help sales personnel reach out in time.
There’s no ultimate conclusion of customer retention: It’s a constant process of improvement. Organizations are going to need to continually analyze their customer retention, and find ways to optimize it.