No matter what industry your business operates in, you need a steady stream of customers to be successful. Customer retention is one of the most important business strategies you will need in order to keep your clients happy, returning time and time again, and recommending you to their friends, peers, and business contacts.
In this article we are going to take you through customer retention – why it is so important, how each department in your business contributes to it, the top 10 factors you need to consider for a low churn rate, and the technology required to improve your customer retention on a sustainable long-lasting basis.
Why is customer retention so important for successful business?
Keeping your customers happy and coming back for more sales is an essential part of your business strategy and will form a substantial amount of your profits if you get your activities right.
To put customer retention into perspective, let us have a look at some of the important numbers:
Retaining customers can be anywhere between 5 and 25x cheaper than acquiring new ones. (Forbes)
Existing customers spend an average of 67% more than new customers. (Demand Sage)
The impact of customer retention comes from different parts of your business, from sales and marketing to customer services and follow-up interactions. Having strategies that allow for personalisation, enhanced customer service, and appreciation of customers can be game changing:
77% of consumers have chosen, recommended, or paid more for a brand that provides a personalised service or experience. (Forrester)
69% of consumers were still loyal to certain brands in 2024, and of all the demographics Millennials show the highest level of loyalty at 73%. (SAP Emarsys)
44.5% of organisations globally rely primarily on customer experience (CX) as the ‘primary competitive differentiator’. (Statista)
Loyal customers are 5x more likely to repurchase, 5x more likely to forgive errors, 4x more likely to refer, and 7x more likely to try new offerings. (XM Institute)
In such a closely connected digital world, customers have more choice than ever, and can do research on businesses (and their competitors) at the touch of a screen or press of a button.
This means that modern businesses need to have the right infrastructure and streamlined operations in place to handle customer services, orders, follow-up, and customer nurturing in order to remain competitive.
TEB provides a powerful CRM solution, supported by advanced automation, AI integration, and inbuilt data analytics with flexible reporting. With world-class performance and intuitive interfaces making the work easy, you and your team can boost your sales, nurture your connections, and build customer retention strategies that work.
How does each department contribute to customer retention?
Your company is more than the sum of its individual parts, and how your teams work together will play a significant role in the success or failure of your customer retention strategy.
Depending on the size and model of your business, you may have some or all of the following departments, so the way you get them working together may be different.
Generally, the following departments contribute to customer retention by:
Sales
Directly engaging with the customer and seeing to their immediate needs. There can also be the opportunity for upselling (upgrades etc) or cross-selling (complementary products). How your sales reps engage with customers can have a dramatic impact on whether or not they return for more sales, and how long you retain them as customers. According to Zendesk, 42% of customers have left a business because they were frustrated by rude or unhelpful staff.
Marketing
Marketing is how you get your brand, product / service seen by customers, and how you encourage them to engage with you. Companies who only focus on obtaining new consumers will often miss out on additional sales from existing customers who feel they are being taken for granted or overlooked. Utilising modern tools and technology to target specific groups, including repeat customers, can allow marketing to be a game changing strategy when it comes to increase customer retention.
Support
Customer service is vital for retaining customers, and with Artificial Intelligence (AI), automation, and the rise of ChatBots, it is expected to be available 24/7 and with an omni-channel presence. Having said this, customers still expect to be able to engage with a real person should they have a particular issue, and this is especially true of existing customers who may have higher expectations due to previous experience/s with the brand. Bain & Company found that companies who excel in customer experience (CX) grow 4-8% above their market average.
Management
Managers are in an unusual position of being both directly and indirectly involved with customer retention. The work they do with the team – scheduling, assigning tasks, managing workloads, can indirectly impact consumers; and occasionally they are required to take a direct approach and engage with clients personally.
Management and team-leader behaviour will not only dictate the flow of operations but can also on a granular level impact customer retention with those who may have complaints, are long time customers expecting a certain standard of operations, or who are looking for that additional boost of authority to convince them that your brand is the right fit.
Each of these departments, teams, and individuals will have their own targets, goals, and needs. If there is no alignment or inadequate communication, then sales can drop and dissatisfied customers will turn to competitors to fulfil their needs.
The top 10 factors to consider for a low churn rate:
Customer retention is something that you need to be constantly working at, you cannot expect consumers to stand by your brand if you are not willing to put in the effort to keep them.
With that in mind, here are 10 top factors to consider implementing in order to reduce your churn rate and improve your overall Customer Lifetime Value (CLV):
Understand your customers and prioritise their needs With the massive amount of data your business will generate on a regular basis, and the right analytics in place, you can determine who your demographics are, what they want, what they need (not always the same thing as want), and how you are going to address their pain points. By positioning yourself to be emotionally connective, customers will feel valued and more inclined to remember and shop with your brand.
Build meaningful relationships Personalisation and hyper-personalisation have been huge trends in the last few years, and this shows no sign of declining anytime soon. Customers want to feel that they are known and expect businesses to be ready (and able) to solve their problems. By taking a pro-active approach and ensuring regular (meaningful) communication and having well recorded customer database entries that include any engagements and what they were about, your team can make customers feel personally validated, appreciated, and seen.
Refine and improve the customer journey Evaluate your existing processes and get an accurate idea of what your customer journey actually is, and what can be improved. It is important to remember that not all customers will engage in every step, and some may not even travel it in the order you would expect. Existing customers may skip certain stages, and there should be appropriate touchpoints, communications, and options for ordering at every applicable point.
Be pro-active with your engagement Your marketing department should be making sure of your data analytics to see what channels are popular, what times and days of the week are seeing content engaged with (and by whom) and making strategies that capitalise on this information. Social media can be a huge help with customer retention, as well as a cost-saving exercise, especially if you are asking existing customers to share their experiences and User Generated Content (UGC).
Make sure your communications offer value Never just contact your customer base just for the sake of it – there should always be a clear and understandable reason for why you are getting in touch, and a clear benefit to the consumer.
Organise internal tasks and assign them appropriately Some of your team may be more skilled than others at certain elements of sales, marketing, support, etc. By making use of pro-active automation and setting specific flags / markers to be looked for, you can ensure your team are constantly working to their strengths.
Streamline your processes and apply them correctly It may be that your product or service needs a certain level of understanding and instruction, which can be a great help for first time customers. However, if you have repeat customers, who have seen this content over and over – they may start to get fed up. Set up email funnels and monitor correspondence so you do not overwhelm existing customers with information that is not wanted or needed.
Implement retention programs and make them actually worthwhile Many businesses have loyalty programs or rewards, and customers do like to engage with these, especially when the result is something that is worthwhile and meaningful to them. These programs need the rewards to be obtainable, suitable, and appropriate to the level of customer input. Getting it wrong and offering something that provides a negative experience or is seen as an insult can cause huge problems for the brand image and customer retention!
Gather feedback and use it! Honest feedback is essential to build and grow. Whether it is positive, neutral, or negative, there is something you can take away and turn into brand action.
Technologies you need to improve customer retention
Customer retention can be managed with the right support and a robust digital infrastructure. Companies who have invested in a data-driven approach often find it far simpler and their strategies more effective because they have this support.
In order to make your customer retention easier, key technologies you need to be using include:
Customer Relationship Management (CRM) software which is capable of integrating into the heart of your business processes and working with your other tools. Depending on your needs and activities, you may also find it beneficial to utilise a service that offers mobile and app support and is flexible enough that real-time operations in and out of the office are possible.
Team management tools where you can assign tasks, monitor workflows, see who is working on what, and how various projects are progressing.
Real-time data analytics and flexible reporting to evaluate performance of both your strategies and your team. Having the ability to make adjustments or address concerns without having to wait for significant milestones can make it far easier to retain customers who may be on the verge of bouncing.
Business Process Automation (BPA) across your entire organisation, which allows for standardised processes, transparency, and higher levels of data protection and reliability.
The more support you and your team have, the easier it will be to focus on the tasks that need engaging with. Having AI, automation, and powerful CRM integrated tools frees up time, resources, and budget, so you can focus on keeping your customers as your customers.
Understand your customers and keep them coming back for more with TEB
Understanding your customers wants, needs, and future interests is going to be key to the successful growth and evolution of your business.
You need the best tools and software to handle a growingly digital world, and TEB can bring you this.
Amongst the streamlined processes, strategic automation, and customisable workflows that allow you to work as you need, your customer retention strategies and lead nurturing campaigns will also benefit from:
Automatic task assignment ensuring that the right team member is given the tasks that suit their skills, are relevant to their designated clients, and will allow for maximum efficiency.
Highly effective task management tools so you can set reminders, highlight actions, and ensure your customer follow-ups, nurturing sequences, and retention strategies are always active and standardised.
Inbuilt data analytics and customisable reporting which allows you accurate information in formats that suit your needs, so you do not need to wait until the end of a campaign to see how you and your team are performing.
Easily collect customer feedback on TEB for product development, improvement and marketing to improve your sales and churn rate.
TEB brings you futuristic advanced software in a format which is simple to use and easy to understand. Supported by full training, and years of experience, your business can evolve to be at your best.
Book a demo with our team today, and see how your customer retention, sales, and marketing strategies will become significantly more effective and profitable.
TEBillion delivered a tailored sales process automation solution for a growing technology company to automate and streamline their complex billing processes.
