Are you looking for
effective and impactful customer retention strategies to retain your existing
customers?
Customer retention is
one of the biggest assets ignored by most of the brands and businesses as they
are obsessed with lead generation and acquiring new customers. To boost your
brand/business value, revenue and sales your marketing techniques should always
include effective and impactful customer retention strategies.
By focusing on
customer retention we are not implying that acquiring new customers and leads
is not good for your business. But retaining your existing customer should be
your primary choice as it can benefit your business in many ways.
According to the
recent survey by SAS and Loyalty 360, compared to the new customer 68% of the
business/sales come from existing customers. Convincing your existing customers
can take less effort and cost compared to your new customer because they
already know about your brand and service. Look at the below ecommerce start to
know why customer retention is important for your business.
In the article, we
will help you to differentiate between customer acquisition and customer
retention. Not online thet but this article will also offer you effective and
impactful customer retention strategies that you can use and implement to
retain your existing customer.
If your business is
getting lots of cart abandonment rate then checkout article on Reduce
Shopping Cart Abandonment Using Different Techniques In 2020
Customer Acquisition Vs Customer Retention
Many brands and
businesses get confused in identifying the difference between customer
acquisition and retention. Both are two different things.
Customer Aquisition
The main goal behind
customer acquisition is to gain new customers to grow sales and revenue.
Customer aquisition is more focused on marketing that means identifying the
potential customers and offering different lead magnets to attract new lead.
It is dependent on
various channels like paid ads, commercials, or direct marketing (speaking
directly to the client to get business). Customer aquisition strategy generally
includes identifying potential customers, creating and implementing different
marketing strategies, communicating with potential leads, and measuring the
success of the marketing strategy.
Customer Retention
Compared to customer
acquisition, customer retention is all about focusing on and nurturing existing
customers to build a strong relationship with them. Once your existing customer
starts trusting you then they will never hesitate to purchase and use your
product and services.
Customer retention
strategies include optimizing your customer service, product quality, seamless
communication, offering loyalty programs, and more. Remember your existing
customers are the ones that will give you more profit than new customers.
Most of the brands and
businesses commit a mistake by ignoring their existing customers are focusing
on new customers below we have discussed why you need to care about your easing
customer. If you are confused whether you should focus more on customer
acquisition or retention then looked at the below chart (Remember both are
important but your existing customer can offer more profit then new customer)
How to Calculate customer retention rates?
If you want to
calculate the customer retention rate for your business then you can follow the
below steps which will offer you a brief insight into how you can calculate
customer retention rate.
- Firstly, it is recommended to decide the time period (month quarter, days, and more)
- Next, identify the total number of customer you had at the beginning (customer purchased form your online store)
- After identifying that next you need to divide the total number of customers you had at the beginning and end of the time period.
- At the end of the time period, you might have gained new customers so before dividing you can subtract new customers by the total number of customers at the end of the time period.
- After identifying that you can divide the number of customers at the end of the time Prayer by the total number of customers at the beginning.
- Multiply the obtained number with 100 to get the customer retention rate.
Why should you always follow up with your existing customer?
Before jumping into
how to improve your customer retention lets look into why you should care about
your existing customer.
Most businesses and
brands around the world think that by providing great products and services
they can make their customer stay. But the harsh truth is that if your marketing
strategy does not include converting your existing customer into a loyal
customer then sooner or later they may leave.
Look at the below image to differentiate between new and existing
customers. Read more on
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