Once you have created a killer product and you have identified your target market, it’s time for company growth to take off. It is important that you dedicate enough resources to retaining your existing customers as well as selling to new ones. This is the reason you need customer success teams to help your customers see the value you offer in your products and services. You need to create a process from the very beginning to end that fosters communication, trust and mutual growth. That said, customer retention refers to the ability of a company to retain its customers over time. It is a percentage-based metric that measures how many customers are retained at the end of a given period.
Customer retention refers to the ability of a company to retain its customers. It is impacted by how many new customers you acquire and how many existing customers churn a business face. Over the course of a given time, customer retention is measured by customer retention rate. Customer retention measures not only how successful a company is at acquiring new customers, but also how successful they are at satisfying existing customers. Having these metrics helps in increasing ROI, boosting loyalty and bringing in new customers. It is also easier and more cost effective to retain new customers than to acquire new ones. Returning customers spend more and buy more often and have a tendency of referring their friends and family. Only a 5 percent increase in customer retention can increase company value by 25-95 percent.
Customer Retention Management
Customer retention management refers to the process of maintaining relationships with your current customers to delight them long after they have purchased your products and services. In doing so, you will encourage these customers to remain loyal to your business. Customer retention is typically managed by customer success. The role of this team is to work with and delight customers throughout the process and duration of your relationship. Customer success teams should not only work directly with customers to improve and maintain retention rates, but also work with other teams within your organization as well.
Set expectations early
If you fail to set expectations and communicate those expectations early, customers can easily become upset. They might believe you will deliver on a certain level, while in actual sense, you fail terribly. At the same time, customers will be coming from very different businesses. One customer might feel that your prices are too high and thus expect a high level of customer service and expertise. If you fail to deliver according to their expectations, you might be setting a precedence for chaos.
You also need to communicate your results on a regular basis. Customers are more likely to stay with your company if your products and services are delivering results and ROI for them. You need to have a good system for tracking and reporting key metrics that matter to your customers and ones that are related to your business goals. Ensure you create a roadmap for future relationships.