What is customer retention and how to increase it in your company

Ensuring predictability of revenue and the growth of a business depends on understanding what customer retention is. People are the basis of a company, whether internally or externally, ensuring their satisfaction is essential to avoid losses. Plus, acquiring a new customer can be 5 to 25 times more expensive than keeping an existing customer! Can you imagine what that represents in your annual accounts? What is customer retention? Customer retention is a company’s ability to keep its current customer base active . Retaining is being able to “hold” customers, preventing them from buying from you and going to the competition. Working with retention is also acting in customer loyalty , a fundamental strategy to be able to retain them in your base. The basic principle for achieving a good customer retention rate is through relationship and trust . People are increasingly demanding and with possibilities to do business. If your company cannot communicate properly with consumers, it will lose value and meaning.

How to calculate customer retention

To calculate customer retention, you need to understand how many customers have left your base. The cancellation fee is quite simple to calculate: number of canceled contracts in a specific period / total number of customers at the beginning of the analyzed period x 100 From this percentage, it is possible to Singapore Phone Number List find out the customer retention rate. Why is it important to track customer retention rate? As we pointed out, acquiring a new customer can be 5 to 25 times more expensive than keeping the consumers in your base. In addition , according to what Harvard Business School found , if a company manages to increase its retention rate by 5% , it can impact profits with a 25 to 95% increase . That is, customer retention directly impacts a company’s annual revenue and, consequently, the brand’s growth and expansion plans. What does your company gain by creating retention strategies? If you are still not convinced of the importance of investing in customer retention.

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Offer personalized service

Personalization is the key to good communication. Hearing a person call you by your name is the basics, but many companies forget to do this. Customers like to feel special and unique, offering this kind of humanized service — without being pushy — is showing that you actually “see” the person. Yes, you DX Leads want her to buy under your brand. But you don’t have to treat all communication with this explicit motivation. Form a team trained in listening and talking to people, looking them in the eye and demonstrating similarities and personalization. Invest in after-sales A sale has been made… that’s it, it’s over. Right? Wrong! Winning a sale isn’t the culmination of the customer relationship — including in retail — it’s the beginning of retention. The post-sales moment is very important to strengthen the relationship, showing that your company wants to establish a partnership with the person. That’s why it’s very important to send messages to see what she thinks about the product, if there are any questions that can help or even offer complementary products.

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