4 Reasons Why Customer Retention Is Key For Any Business

4 Reasons Why Customer Retention Is Key For Any Business

A customer’s loyalty is hard to come by. The last thing you want to do is lose a customer whose loyalty you had already managed to earn. And that is where customer retention comes in.

The ability of a business to keep its customers coming back over time is known as customer retention. Retaining a consumer’s business signifies that a brand, product, or service is appealing to the existing consumer that they choose to do business with the company rather than switching to another one.

So, the question lies – what can effective customer retention bring to the table? In this article, we discuss 4 reasons why customer retention is crucial for any business.

1. Repeat profit and increased revenue

It is undeniable that loyal clients make more frequent purchases. Because they have made purchases from your business before, they are aware that you are able to provide them with the goods and services that they are looking for.

In fact, did you know that customers that are loyal and make frequent purchases typically spend up to 33% more money than those that do not? Moreover, they are also 50% more likely to purchase new products or try out new services due to the mutual trust that has been established.

They believe that because they are a valued client, your company is more likely to pay attention to their needs and deliver more than other companies that provide comparable services.

When they make repeated purchases, this means that your business is able to enjoy repeat profit. A slight increase in customer retention can sky-rocket your company’s revenue significantly.

2. Reduced marketing costs

Your business spends less on marketing strategies like building brand recognition and promoting your product line when you have excellent customer retention. After all, the customers you have retained are already familiar with your goods and services.

According to research, marketing to a current customer costs roughly $7, whereas marketing to a completely new customer costs around $34 – more than four times as much!

3. Word-of-mouth advertising

Adding onto the previous point of reduced marketing costs, loyal customers are more likely to become advocates for your business, sharing their positive experiences with those around them.

Word-of-mouth can boost your company’s credibility immensely. This is because people tend to trust the opinions of those who are close to them more. Studies have found that 92% of people trust recommendations from their family members and peers over any type of marketing.

Hence, if you have your customer retention nailed down, you will be able to boost brand awareness and recognition at no additional costs!

4. Gain valuable feedback to propel your business forward

Creating a remarkable customer experience requires you to listen to your customers if you want to win them over. Surveys have found that 55% of customers said they are not likely to continue being a customer of a company that ignores their comments, while 97% of consumers said they are likely to grow more loyal to a firm that incorporates their feedback.

It is incredibly beneficial to be proactive and ask your loyal clients how your company can better serve them. This can open up new possibilities for you that you may have overlooked or never have thought of – these suggestions directly address the customer’s needs and will undoubtedly propel your business forward.

Conclusion

Given the many benefits of customer retention, it is crucial to possess the skills to effectively manage your clients and establish a meaningful relationship with them.

If you are interested in brushing up on your skills in managing customer feedback, consider signing up for Aventis Learning Group’s Turning Customer Complaints Into Our Opportunities course. Through this 2-day course, you will learn how to manage and resolve negative feedback from customers to build customer loyalty and retention for your business. And for those looking for IBF funded courses, you’re in luck. This course is accredited under the IBF Standards and is eligible for funding.

To learn more about Aventis Learning Group’s in-house training courses, visit our website for more information.