The Role of Customer Service in Customer Retention

The value of great customer service cannot be overstated. It is the foundation of every successful business. Quality customer service translates to happy customers who then become repeat customers and in turn hinders the possibility of the customer moving to the competitor.

Did you know that…

• It is five times more expensive to acquire a new customer than to retain an existing one.
• It is also true that profits can increase to as high as 95% just by increasing customer retention by 5%
• The rate of closing a sale with an existing customer is 60-70% while that of selling to a new customer is 5-20%

In this regard, great customer service should be the focal component for a successful business strategy to aid in maintaining the existing customer base.

So what really is Customer Retention?

It is the ability for an organization to maintain the existing clientele base over time. When your customer service is satisfying to the customers, they will come back to make a repeat purchase, which for the business means increased revenue without necessarily having to convince a client to buy from you.

It is therefore important to ensure that the clients you worked hard to get do not fall through the cracks as you try to acquire new clients.

According to Harvard Business Review, customer retention increases a business revenue by 67%

Benefits of Customer Retention to a Business

More value to the business

When a customer gets value from a product or service and at the same time has a great customer experience, they tend to be repeat customers. They tend to buy more simply because they know the product and they had a previous satisfying experience.

For the business, efforts to persuade a client to buy from you are directed to new potential clients. This in turn means efforts are redirected to marketing an existing product or service, to possible customers because your existing clients are already buying from you.

Try new products and services

Your repeat clients are also more likely to test out a new product or service mainly because they trust your brand.

Bring in new clients

Again, for those existing clients who have had a chance to interact with your brand for some time, trust in the product and service you provide and they are hence more likely to recommend your business to other people.

Positive feedback builds a reputation of quality customer service which is an excellent way to market your business.

 

How to Achieve Customer Retention for Your Business

1.Customer Service

Customer service involves guiding and assisting a client even before they purchase your product or service, during and after they make the purchase. Keeping in mind that there are competitors in the market, your customer service will be your differentiator as a business.

Try to remember a time you had a bad experience with an organization, terrible feeling right? The same is true for your clients. If they have a horrible interaction with your business, they will not be coming back and they may tell of their experience to others hence impacting not only your customer retention rate but in the acquisition of new clients as well.

Offering outstanding customer service experience ensures valuable customer relationships such that your repeat customers will still purchase from you even when a competitor is offering the same product or service at a lower rate.

Making it easy for your customers to reach you when they have a complaint is important. Making sure you effectively resolve complaints as soon as possible may turn an unhappy customer into a loyal and repeat client.

Ensuring customer satisfaction and going over and above what the customer expects is a great driver for customer loyalty.

2. Introduce A Loyalty Program:

With a promise of a valuable reward, loyalty programs encourage the clients to purchase more and as well as purchasing frequently to earn points that will enable them to get the reward. This program works for both the customer and the business because the clients gain value every time they purchase from you and the business earns from the repeat buy from the clients.

Sometimes the customers may not be too eager to create an account with the loyalty program but you can entice them to do so by offering them some welcome points should they open an account.

You may have noticed that some clothing stores have a reward program and from the points earned, the customer can get discounts on their next purchase.

Airlines too have perfected this, with points earned one can upgrade their ticket from say an economy class to a business class ticket. They also offer discounts on a number of hotels that they have partnered with, to which anyone on their loyalty program can access.

3. Keep Engaging your customers

As a business owner, you need to know and understand your customers. Identifying the channel that your customers respond to is essential to keeping them engaged and informed. So is it email marketing, social media, online events or other channels?

Sending out customer centric emails to your clients keeps them engaged while at the same time, marketing your product and services.

Email is a tool that helps you to keep building a relationship with your customer even after they have made a purchase. Ensure that the email sent adds value to the experience of the customer.

You may decide to send a thank you email to a client after they have purchased your product and  service and adding a personal touch to this goes a long way. For instance, a personalized email addressing the customer by name makes a client feel valued and appreciated and it makes your business more approachable.

You can add value to the email by recommending a product or service that compliments or enhances the initial purchase. By going a step further and adding a positive review of the recommended product, affirms a client’s decision to make the purchase.

After sending the initial email to a new client, you may also want to make a follow up with a personalized email about an upcoming sale or a new product or service. Letting the customers share their opinion on an upcoming product or service makes them feel included and part of the brand.

4. Delight Your Customers

People like to know that they are getting value for their money and when savings is added to that, it makes your existing customers and more so, your first time buyers excited for their next purchase.

For the first time client who just made their initial purchase, you want to keep them engaged and coming back to buy more from your business. You may consider giving them an unexpected offer such as a discount of a certain percentage, free or a subsidized delivery fee.

Sending your first time buyers a discount code gives them that extra push and motivates them to make the next purchase with you.

5. Online Presence

In this day and age where technology has overtaken the traditional way of doing business, does your company have a digital footprint? With a majority of the population, Millennials and Generation Z, spending a lot of their time on the internet, it is vital for any business to ensure they have an online presence.

Having a strong brand online coupled with a sturdy social media presence puts your business at an advantage as your customers are able to interact and connect with you in real time.

However, it is not enough to just have a page online, you need to ensure you put out content that offers value to your potential, as well as existing customers. Share information about the various products or services you offer, the value, the way they compare with other products, what makes them unique etc.

Sharing useful tutorials or case studies enlightens your customers and gives them the confidence to engage your business and keep using your products. The online platform also allows your customers to participate in offering quick positive feedback about your business.

Negative feedback is also not spared on the online space, so you want to ensure your customer care team is well versed with possible issues that may come up and quickly resolve the issues mentioned. You could refer to my earlier article on problem solving on how well to resolve issues.

Offering a remarkable product or service is just the first step to gaining customers but to keep them and turn them to repeat loyal customers, your customer service has to be capable of offering that extra that keeps the client coming back.

 

Your customers are your most important asset…

As a company grows, customer retention is key metrics in the survival of a business. The existing customer base is an asset for any company.

By ensuring that your company is offering unparalleled customer service experience, which goes above and beyond the customer’s expectations, will help build solid long lasting customer relationships which will in turn boost your value and revenue.

Has your team gone through customer service training? Are they well equipped to ensure that you not only acquire new customers but actually keep them? Reach out to Customer Centric Kenya for a tailor made training just for your business.