By Nicole Hanson
March 17, 2021
Customer loyalty is crucial to the success of any business. According to Bain & Company, a 5% increase in customer retention correlates with at least a 25% increase in profit. Loyal customers not only mean recurring revenue for your business, but they also tend to spend more per purchase and have a higher lifetime value.
Retention should be a top priority for your brand, especially since acquiring new customers costs 5x more than retaining existing customers. Here are three articles with helpful tips to boost your customer loyalty in 2021.
While businesses are starting to recover from the impact of Covid-19, consumer behaviors are continuing to shift. Many shoppers are delaying purchases or looking for the best price tag, even if it means shopping outside of their usual brands. Among his five tips to boost customer loyalty, author Vasudeva Akula recommends improving customer service interactions and investing in analytics or machine learning technologies. “Deep analytics can help offer better personalization, identify customer pain points, and design effective loyalty programs,” Akula says. By learning from your customers and being proactive in your retention efforts, you can enhance the customer experience and improve brand loyalty once again.
Empathy has been a huge talking point in customer experience this year, and it is very beneficial to your retention efforts as well. In this article, author Yad Senapathy discusses how surveys, reviews, and customer service interactions all provide the opportunity to have meaningful interactions with your customers. “When you understand their likes, dislikes, concerns, and comments, you better position your business to deliver a more refined product or service designed to solve their needs,” Senapathy says. Actively listening to your customers and building empathy into your marketing strategy can help your brand improve retention and revenue.
Customer churn can have many negative impacts on your business, including loss of recurring revenue and higher marketing costs. Traditional retention efforts tend to focus on a reactive approach, which often addresses a problem too late. However, a proactive retention approach based on data and machine learning is much more effective and inexpensive than a reactive approach. Author Raviteja Sidda says, “With retention being the key to the long-term business growth, proactive retention can prove a sustainable competitive advantage in an uncertain environment where customer preferences are always evolving.”
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