With almost 65% of a company’s business coming from repeat customers, focusing on increasing customer retention by 5% can increase profits by 25% to 95.
What is Customer Retention?
A company’s ability to turn customers into repeat buyers and prevent them from switching to a competitior. Customer retention indicates whether your product and the quality of your service please your existing customers. A single loyal customer making several purchases over a year is ultimately more influential than several that buy once and never again. You can rely on the business of a retained customer far more than a new one if you make the happiness and loyalty of your existing buyers the priority.
“Acquiring new customers is more costly than retaining existing ones”. T.Harv Eker
Why Customer Retention Matters
If you look arround your desk or room, you will likely find a product created by a major brand, a business near the forefront of its industry. It is doubtful that it was able to reach such a status by relying almost exclusively on the one-time purchase of customers in passing. After all, returning customers spend %67 over time than first-time customers. Successfully retained customers signify a meeting or exceeding of expectations to an exceptional degree. Customer retention matters because it forms the foundation of ever-increasing earnings and enables you to boost brand recognition and industry authority.
3 Effective Customer Retention Strategies:
1- Treat Customers As Humans, Not Data
It is no secret that customers are not fans of AI chatbots, as a common complaint is that these bots do not understand them. AI typically to keywords and specific scenarios instead of the individualized human experience. They cannot offer the empathy that a customer may seek and only get from talking to a human. With this in mind, it is important to remember that customers are people, not data.
2- Frequently Ask for Feedback
Do not be afraid to ask your customers how you are doing, even if the answer is not as pleasant as you would hope. Even if positive feedback feels good, it is often the negative feedback that is important. If customers aren’t happy, they will not buy from a business again.
One thing to avoid is having a single survey or poll and then using those results forever. Times change, and so do the needs and wants of shoppers. Make it a point to ask questions periodically and compare the nature of the newest results to previous requests for feedback.
3- Become Difficult To Replace
Being unique in a positive sense and very hard to replace can be a brilliant strategy for customer retention. After all, it is easier to hold on to customers when they understand that they cannot easily replicate their positive experience with your brand elsewhere in your industry.
Enhancing Customer Retention with Artificial Intelligence
Personalized Customer Experience:
- AI can analyze customer data to create algorithms and provide customers with personalized experiences.
- For example, based on customer’s past purchases, AI can recommend products tailored to their preferences, enhancing the overall customer experience.
Predictive Analysis and Demand Forecasting:
- AI utilizes predictive analytics to forecast future demands by analyzing historical data.
- Business can optimize inventory management and meet customer demands more effectively by developing strategies based on accurate predictions.
Sentiment Analysis:
- AI can perform sentiment analysis on customer feedback and reviews.
- By automatically analyzing sentiments expressed by customers, businesses can identify areas for improvement and respond promptly to both positive and negative feedback.
Customer Feedback and Improvement:
- AI analyzes customer feedback automatically, providing valuable insights for businesses.
- Rapid responses and improvement measures based on customer feedback contribute to increased customer satisfaction and loyalty.
Automated Advertising and Marketing Strategies:
- AI creates automated marketing strategies by analyzing customer behaviors.
- Targeted advertisements and campaigns, tailored to individual customer preferences, can be implemented to increase customer loyalty and engagement.