It’s been proven: A 5% lift in customer retention can boost profits by at least 25%.
Of course, improving customer retention’s easier said than done. But we’ve put together a research-backed plan that’ll help. It’ll show you how to improve performance in the three main areas that are tied directly to your company’s retention rate:
Here’s how to approach each one:
Programs: Give ’em a head start
Consumer researchers recently conducted a customer loyalty program experiment at a car wash. Different loyalty cards were given to two groups of 150 people each:
So while the requirements were the same – pay for eight washes and get one free – the perception was totally different. Group No. 2 felt like they were already 20% there. Result: Over the next nine months, 28 of the 150 people in group No. 1 earned a free wash, while 51 of those in group No. 2 earned a free wash – that’s 82% more!
Bottom line: Creating a sense of progress increases repeat business.
Service: Connect to sales
Nearly half the customers who left a company say it was due to poor service, according to a recent survey. Marketers can stop those losses by fusing service and sales together. One way: When a customer calls with a concern, make sure Customer Service forwards the caller to the salesperson responsible for the account.
Proven benefits of this approach:
Rewards: Partner with finance
More than 60% of companies considered best-in-class when it comes to customer retention work with their Finance folks to create incentives for marketing and sales reps to lift loyalty. “Loyalty bonuses” give reps extra motivation to spend more time with existing buyers to help them:
Your company will pay out a bit more in the short term, but see tremendous ROI long term.