How increasing Customer Retention Increases Revenue Growth

Customer retention is an essential aspect of business for most small and medium enterprises. This strategy can hugely contribute to the profits generated and the overall success of the company. Before discussing ways through which this is possible, let’s discuss the concept of customer retention.

Customer retention is the process through which businesses take concerted efforts to maintain their existing customer base. In simple words, it is the process of retaining existing customers to the point of loyalty. When a business has achieved its customer retention goals, it will have a vibrant and loyal customer base that buys or patronize any of its products or services at all times.

The process of retaining existing customers includes several simple steps. Some of these steps are

Manage Customers Expectations

Whenever an individual approaches your business, they have expectations. While some may expect average results, others may set their expectations a bit lower or even higher. What you need to do at this point is to ensure that you meet their expectations, at least. Ensure that your customer does not leave your business disappointed.

Maintain Trust

Once customers catch a whiff of shady practices or behaviours in your business strategy, they may start to leave. As much as customers are concerned, they cannot trust your product or services if your practices are shady. Hence as much as possible, stay clear of any dubious practice or image tarnishing news.

Personalization works

Go personal with your customers. This means that you ensure that your products and services address their issues. Rather than doing what the general market is doing, seek how you can help them solve problems pertinent to their personal lives.

While this step may require creative thinking, extra cost, and effort, the benefits overwhelm the resources spent in its course. However, no matter how personal you get, you should mind their privacy and not cross the line.

Reward Loyalty

Another critical step in the process of customer retention is rewarding loyalty. While you give customers reasons to remain loyal to your brand by providing quality products and services, you should ensure that you reward their loyalty.

Rewarding your customer’s loyalty comes in different forms. It could be in the form of bonuses and bonanzas. You can also set up a form of a discount on services for long-standing customers. The underlying point is to ensure that customers get something beneficial for staying loyal to your brand at the end of the day.

How increasing Customer Retention Increases Revenue Growth

Having discussed how to retain customer’s patronage, let’s examine how these processes help your brand make more profit.

Loyal Customers

Many of the big names in numerous industries gained their status through their loyal customer base. Customer retention begets a loyal customer base. When people see that your products and services not only solve their problems but also exudes elements of transparency, they stick with your brand.

Free Referrals

Your loyal customers will patronize your brand and refer their friends and colleagues to your brand. This is a form of free publicity for your brand, all thanks to customer retention. These referrals mean more customers, which translates into more sales and profit.

Loyal customer means that your products and services get patronized by a large population of people and you have a bright future for your business.