3 Ways to Boost Your Customer Retention Rate With Service

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Gartner research shows that by 2018, 70 percent of business-to-business ecommerce sites will offer customers personalized features, and sites effectively using personalization will outsell competitors by 30 percent.

Seventy percent of companies agree that retaining customers is cheaper than acquiring new ones, an Econsultancy report on cross-channel marketing found. Forty-nine percent find that building existing customer relationships brings a bigger return on investment than acquiring new customers.

For instance, in the financial services industry, a five percent increase in customer retention increases profits more than 25 percent, according to Bain & Company. Eighty percent of your future profits will come from 20 percent of your customers, Gartner says. As these numbers illustrate, prioritizing customer retention represents a highly leveraged way to increase your profits. Here are three strategies you can implement to keep your customers coming back and increase your customer retention rate.

Improve Your Customer Experience

Supermarket retail chain Asda doubled repeat business from its app users after improving its app to address research showing that customers wanted a quicker and more convenient shopping experience. Eighty-one percent of customers are more likely to return to a company for repeat business after a good customer service experience, a Kissmetrics survey found. Conversely, 52 percent will never do business with a company again after a poor experience.

To begin improving your customers’ experience, Kissmeterics recommends you put someone in charge of customer experience to oversee performance. You should also measure your performance using multiple metrics, such as incident volume, response time, and resolution time, soliciting feedback from your customers. You can then identify the issues your customers find most urgent and focus on improving your performance in these areas.

Build Personal Relationships

Experimental results published in the Journal of Applied Psychology showed that waiters were able to increase their tips 23 percent by returning to tables a second time after leaving the check and offering a second set of mints in case anyone wanted more. Analysis against control groups determined that the personalized attention the waiters gave tables accounted for the increased tips. Personalization is becoming increasingly important in today’s online business environment.

Gartner research shows that by 2018, 70 percent of business-to-business ecommerce sites will offer customers personalized features, and sites effectively using personalization will outsell competitors by 30 percent.

To improve online personalization, Gartner recommends B2B sellers should design websites to make shopping quicker and easier for busy buyers. This guideline can also be implemented by companies who market to consumers. For instance, Michelin takes the hassle out of tire shopping by allowing website visitors to easily find name-brand tires that match their car’s make and model, get tires delivered to their local installer or home, and arrange to get their tires installed by professionals. Consumer-oriented sites can also offer customized cross-sell buying suggestions and deals, as Amazon does with its feature recommending products bought by other buyers.

Track Customer Satisfaction

For every customer who complains about a problem, there are 26 more who have the same issue but don’t tell you about it, according to a Lee Resources International study. Unfortunately, they’re still likely to complain to their family and friends, costing you potential customers.

Being proactive about soliciting customer feedback is the best way to prevent such bad publicity. Help desk software provider Groove tracks customer satisfaction by sending out a two-question survey every three months. The first question asks customers to score on a scale of one to 10 how likely they are to recommend Groove to a friend or colleague.

The second question asks the most important reason for the score. Answers to the first question allow Groove to identify what percentage of customers is likely to promote the company versus what percentage is likely to spread complaints. Answers to the second question identify underlying factors that indicate what needs to be addressed to improve customer satisfaction.

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