Customer Acquisition Vs Customer Retention: How to Build the Perfect Strategy

The internet has made the world seem smaller. As far as businesses are concerned, the internet has made it easier to overcome geographic and physical barriers to reach consumers. But the digital world has provided customers with ample options to choose from, resulting in increased competition.

It comes as no surprise that customer acquisition is one of the biggest challenges faced by businesses in the current climate. In fact, this has always been the case. Research shows that it is five times more difficult to get a new customer than to retain an old one. A business is also 60-70% more likely to sell to an existing customer than a new one.

While customer acquisition is important and should not be overlooked, over 44% of business owners admit making customer retention their main focus has generated greater revenues and helped their business grow.

Why is Customer Retention Important?

As you may know, there are stages of a consumer’s life cycle. Right from brand awareness to consideration to conversion, a consumer goes through several stages before becoming your customer. It takes greater effort to generate fresh leads and go through the initial stages of the consumer life cycle.

Think of it this way, you’d be more likely to hitchhike a ride from a neighbour than a total stranger. You’d be happier still if you were hitching a ride from a friend.

How to Improve Customer Retention?

The secret to customer retention is as simple as quality services and products. Your business can form a lasting impression on the customer with prompt responses, quick deliveries, and quality products. When businesses are unable to meet these standards, the customers tend to feel cheated, frustrated, and often feel disappointed.

There’s no faster way to lose customers than sub-par service.

There are simple ways to improve customer retention. Here are some of them-

Using Online Channels

Online channels provide such an effective and informal way to connect with your audience. One of the biggest advantages of social media is that gives you direct access to your target audience. Platforms like Instagram can help build relations with consumers. It can also help you conduct market research or get feedback using interactive posts, engaging polls, questions, and quizzes.

Online reputation helps businesses monitor online channels to understand the public perception with respect to the business. This is an effective means of customer retention.

Businesses use online channels like Twitter to experiment and test the water before launching services and products. Apart from customer retention, this also helps improve your services and products.

Quantify Your Assessment

To ensure good customer service, you must set a definite standard of quality. Defining quantifiable parameters helps remove ambiguity and sets a standard for your service. You can easily improve your service and in turn your customer retention by answering these questions-

• How long does it take to answer calls on your helpline/number?
• What percentage of the stage is trained to meet set standards?
• Are the premises clean and hygienic?
• How much time does it take to process orders?
• How high is our after-sales service rated?
• How many order errors are reported?

These questions will be able to help you improve your customer retention strategy by helping you identify the areas you need to work on. It will help you build a clear step wise-strategy to improve client retention rates.

Handling Complaints

100% customer satisfaction without any complaints is an unrealistic standard to set. One should not expect to eliminate complaints as it is not feasible to do so. But how to respond to complaints can help improve customer retention rates. Research suggests that customers who made a complaint and got a satisfactory response were more likely to become repeat customers than the ones who did not make a complaint.

This is because when customer issues are resolved, it makes them feel like their business is valued. This is one of the most essential parts of customer retention.

After-Sales Care

If you’re willing to reach out to a potential customer with newsletters, content, ads, and re-targeting, you must also put an equal amount of effort into after-sales care. The most important pillar of customer retention is the relationship you build with them. Make sure you maintain the relationship with your customer. Keep reminding them of your products or services. Send them updates, inform them of new developments.

Ensure your company and products are always fresh in their mind. Customer retention becomes much easier when the relationship with them is nurtured.

Loyalty Schemes

Another great way to make tour customers feel special and improve customer retention is loyalty schemes. Reward them for reconsidering you. Loyalty schemes help you show the customer that their business is valued. And who doesn’t love a good discount right?

Customer retention is an integral part of a company’s growth and should be given sufficient importance for a business to thrive. You can easily improve customer retention for your digital business using these practices. Test these out and see the results for yourself!