Why Building Customer Retention Strategies are Essential for Businesses
Using automated support tools such as Help Desk Software can help increase the efficiency of support teams and improve the overall end user experience but, equally as important, it can also be used to enhance brand loyalty and develop a successful customer retention strategy.
Typically, the importance of customer retention is often overlooked in favour of advanced features when it comes to finding a computerized customer service tool. But, as it costs businesses up to five times more to acquire new customers than it does to retain existing ones, it’s time to start taking customer retention seriously.
What Is Customer Retention?
Customer retention is a marketing strategy used to retain and extract more value from existing customers.
By nurturing your customer relationships, you can keep customers loyal and happy. In a 2017 Microsoft study, 96% of respondents said that customer service is important when it comes to brand loyalty.
Broadly speaking, this means delivering excellent customer service and reducing the amount of effort a customer has to make to enjoy the product or service they’ve purchased.
The aim of customer retention is to increase Customer Lifetime Value (CLV) and reduce churn. CLV represents a customer’s total worth to a business, during the time in which they’re a customer. For example, if one customer spends £100 per year with your business every year for five years, their CLV would be £500.
Why Customer Retention Is Good for Business
As well as building a customer base and acquiring new users, it’s important for businesses to focus a large part of their strategy on customer retention. There are various reasons why this is essential, such as:
- It costs five times more to get a new customer than it does to retain one
- Increasing customer retention by as little as 5% will lead to an increase in profits by 25%-95%
- Businesses are 60-70% more likely to sell to existing customers, compared to a 5-20% likelihood of selling to new customers
Even a minimal increase in CLV (customer lifetime value) can lead to substantial gains in overall revenue. For example, imagine that 500 customers are each spending £25 per month on a subscription service. The average lifetime of a customer is six months, equating to total revenue of £75,000. By retaining these existing customers for ten months instead of six, an extra £50K in revenue could be achieved.
But, how can businesses convince customers to stay with their business and not be tempted to look elsewhere? Some tried and tested customer retention strategies include:
- Setting up a loyalty program
- Offering free samples and gifts
- Providing loyalty discounts
- Sending out personalised thank you notes
One important factor that businesses should be focusing on is the interaction they have with customers when they’re seeking advice and assistance.
This means dealing with complaints swiftly, being responsive on social media, and providing the opportunity for customers to get in touch via multiple communication channels. Including live chat, email, phone, Facebook, and Instagram.
Effectively managing all the strands of a customer retention strategy can, however, be challenging. But this is where customer retention technology, such as Help Desk Software, can help.
5 Ways a Help Desk Tool Can Increase Customer Retention
A help desk solution will provide features such as analytics, automation, and omnichannel support to help build an accurate and effective customer retention strategy. With these tools, businesses are able to:
1. Align Multichannel Support
Customers have a range of ways to get in touch with and buy from a business, including:
- Social media platforms (Facebook, Twitter, Instagram)
- SMS & Direct message
- Live chat
Rather than these channels acting as individual touchpoints, customers should feel as though they’re getting a unified and contextual experience – no matter which channel or device they’re using.
According to the Microsoft 2017 State of Global Customer Service Report, 66% of consumers surveyed said that they actively use three or more channels. With many customers jumping from channel to channel throughout a single enquiry, an omnichannel, cohesive approach is crucial.
Help Desk Software helps bring together all of a business’s support channels to allow them to offer an omnichannel experience. Support agents are then able to access each customer’s full order history, previous conversations, and any other notes – irrespective of the channels they’ve used.
This service also means customers won’t have to waste time repeating themselves – something that 31% of UK consumers consider to be the most important aspect of a good customer service experience.
2. Enable Proactive Support Processes
Exceeding customers expectations is a solid way for businesses to take their customer service levels from good, to outstanding.
It’s also an important step to ensuring a good customer retention rate, with 58% of UK consumers admitting they have a more favourable view of brands that contact them with proactive customer service notifications.
By utilizing insight tools, businesses can potentially identify customers who are using their product/service less frequently than usual. They can then re-target them with a personalized email to try to resolve any issues.
3. Improve Customer Service
Many help desk tools have automation capabilities, which are helpful in improving and speeding up resolutions.
Auto-responders, for instance, can keep customers up-to-date on the status of their request. They can also include links to tutorials and help articles in case the customer wants to resolve a query themselves.
By automating responses to knowledge base content such as FAQs, customer service agents have time to focus on more complex problems and provide in-depth support to their most valued customers.
4. Provide Effective Self-Service Modules
90% of global consumers expect businesses to offer a self-service online portal. Help Desk Software allows businesses to create and display necessary documentation, such as articles and online training, in a separate area of the website. Also known as a knowledge base.
This allows customers to research and find answers to their problems themselves, without the need to create a support ticket.
An example of a self-service portal that performs admirably is Canva. They provide a range of tutorials and online support that web visitors and subscribers can make use of without having to get in touch.
5. Report on Service Level Agreements (SLAs)
Help desk software helps businesses to monitor customer service agents and ensure that SLAs are being met.
Through reporting tools, support managers can look closely at the response and resolution times of their agents, which, in turn, gives them an indication as to how happy customers are likely to be.