The Best Approach To Achieve A High Customer Retention Rate

10/05/18 09:49 AM By Leonyl

Before we give you an elaborate explanation of Customer Retention strategies and tips in increasing the rate, let’s identify first why it is imperative to retain our customers.

Measuring your customer retention rate is a very crucial factor in determining how good your customer service is. It will give you a reliable metric which you can use to anticipate your business’ growth - whether or not you're going at a fast pace. At the same time, you can benchmark your performance and identify the areas you need to focus on. Here are cold hard facts about the importance of customer retention:

  1. Your loyal customers are worth ten times as much as their first purchase.

  2. Studies from the US Small Business Administration and the US Chamber of Commerce shows that it is 5-7 times more expensive to get a new customer than to retain an existing one.

  3. According to a statistics conducted by various groups such as Lee Resource Inc., Brain and Co., and Gartner Group, losing a customer will cost a company an average of $234.

Customer profitability usually has the tendency to increase over time, because the longer your customers have been with you, the more frequently they will buy from you. This will pull them up to the highest peak of the ladder, which is an advocate. And that's what we all want our customers to be.

It is good to remember that customer retention rates may differ depending on your business. And your target metrics may not be the same with other companies in other industries. For some, an 85% customer retention rate is their target, while for some industries, it is considered as the baseline. Of course, the ideal percentage would be 100% retention rate, and yes, we should strive to achieve that, but at the same time, our objectives must be realistic. We can't control our customer's preferences, and we can't stop changes in trends. A good retention rate to aim for is 90% to 95%. So how are you going to achieve that?


BUILD CUSTOMER TRUST THROUGH PERSONALIZED RELATIONSHIPS.

Trust is the best Return on Investments you can get out of your customers, and cultivating your customer's trust will garner their loyalty.

Do some research on their preferences, behaviors and see how your products or services can impact their activities. Once you have that information, you can use that shared value to strengthen your relationship with them.

SET THE RIGHT CUSTOMER EXPECTATIONS.

It is safer to set your customer's expectations lower than what you can actually provide because when you deliver more than what was promised, your customers will be pleased with you. On the contrary, if you over-promise and under-deliver, you will look incompetent to your clients. They will think that you can't keep your word and they will lose their trust in you.

GO ABOVE AND BEYOND THE EXTRA MILE.

There are numerous simple yet effective ways that you can do to woo your clients. Make their concerns your concerns, and be proactive in addressing them. Anticipate potential issues and give them advice on what to do in case they encounter such problems. If your clients know that you value them, they will also go the extra mile for you, and they will voluntarily advertise your brand for you.


At Devtac, we know the importance of CRM in business, and we know what will contribute to your business's growth. As one of the leading CRM Solutions Provider in the Philippines, we can help you achieve your goal. Worried your customers aren't satisfied? Give us a call or send us a message.