7 Effective Strategies to Increase Customer Stickiness

Customer stickiness and retention are often overlooked in the pursuit of acquisition, but it is vital for the health of any business to keep customers coming back.

According to Harvard Business Review, attracting new customers can be 5-25 times more expensive than keeping them.

More than two-thirds (or more) of a company's revenue comes from its existing customers,? according to Small Biz Genius. The organization notes that a mere 5% increase in customer retention can lead to a 95% increase in profit.

That may be because the likelihood of selling to a customer, new or old, is anywhere from 5 to 20%, and selling to an existing customer is between 60 to 70%, respectively, according to SEMrush. In addition, they found that customers who have been with a company for 31-36 months spend 67% more than those who joined the brand for six months.

Only 18% of businesses are focused on retention per SEMrush, while 44% focus on acquisition.

This article will help you stay ahead of the pack. Let's now discuss what you can do for your customers to stay loyal.

1. Keep track of it

Your CRM will have all the information you need to track customer retention and churn if used properly. You can track retention for any period of time. It is the percentage of customers who stay with you. The inverse of retention is called the churn rate. It is used to identify customers who leave, end a subscription, or terminate a relationship.

Industry-specific retention and churn rates can vary. According to SEMrush data, retail is at an average of 63%, and banks are at 75%. Insurance and professional services industries also rank high at 83%.

Do not lose heart if your goals are not being met. It doesn't matter where you are at the moment, but it is important that you start measuring your situation and take steps toward improving it.

Calculation of Customer Retention Rate

[(E-N)/S] x 100 = CRR

• E: Customers at the End of Period
• N: New Customers Gained During the Period
• S: Customers at the Beginning of Period

Let's suppose you want to find your quarterly retention rate. You had 1,500 customers at the end of the last quarter. 50 new customers were gained during the quarter. The calculation is [(1500-50]/1600] x 100 = 90.6. Your retention rate is 90.6%.

Calculation of Churn Rate

(Customers Lost / Original Customers) x 100

?Let's suppose you had 100 customers at the beginning and lost five. This equation is (5/100 x 100 = 5). Your churn rate equals 5%.

2. Place your emphasis on service

According to Gallup, customers are nine times more likely than others to use terms like "courteous, willing, and helpful" when describing a brand's services. It is also true in reverse. According to an American Express poll, around a third of consumers would consider changing companies if they experienced bad service once. Bad service has already caused more than half of the respondents to abandon their purchase plans.

To increase customer loyalty, it is essential to provide quality service. It is the foundation of everything else.

3. Have shared values

People want to feel confident about the brands that they choose. According to a Harvard Business Review poll, around two-thirds say they have a relationship that is based on shared values.

According to Small Business Trends data, 70% of consumers like brands with values that are similar to theirs. The figure rises to 83% if you cater to millennials.

Although your brand's values may not necessarily have to be extraordinary, standing up for something and making it known will help you build stronger relationships.

4. Get feedback

You need to speak with two types of people: current clients and former customers. Current clients will be able to tell you what they think about your company and even offer you the chance to fix any problems. You are more likely to hear from your past clients.

You can get feedback from customers by using surveys. It's simple to send customers surveys after interacting with your company. Surveys don't have to be long. You can make your surveys shorter to increase the likelihood of people responding.

For example, the Net Promoter Score is calculated by asking one question: "How likely would it be to recommend…?" Respondents are then asked to choose a number from 1 through 10 and log their responses. The company's future growth and customer loyalty can be analyzed by accumulative answers.

Although you may be able to reach past customers through surveys, it is more likely that you will gain insights using a social listening tool. This software scans the internet, looking for mentions of your company's name or brand terms, and then reports back to you. Some software can log brand sentiments, which will give you a better idea of your online reputation.

5. Boost engagement

Although they are often used interchangeably in this article, stickiness, loyalty, and retention actually refer to different aspects of the relationship people have with a brand.

Simply put, retention refers to customers that you keep. People may come back to your business, but they may not feel a strong connection or develop a real relationship. For example, let's say you own a neighborhood market. There may not be any other markets near yours, so you will likely retain more customers even if they don’t enjoy coming to your shop. However, if a competitor opens a shop nearby, you will probably lose them.

Loyalty is more about a customer feeling that a brand is theirs. They often share the same values as a brand they are loyal to and will recommend it to their family and friends. If necessary, they'll defend it. They share an emotional bond.

Stickiness refers to customers returning to your brand over and over again. If you have a SaaS business and your onboarding program draws customers back to your software for tasks, this will increase your stickiness. Stickiness is also achieved by getting customers to return and complete another transaction.

Stickiness does not always mean a transaction. Stickiness can also be defined as when someone engages with your brand. This is one of the reasons I love content marketing. Your stickiness grows every time a customer reads your content.

These seemingly insignificant increases in customer loyalty will ultimately increase your revenue and retention.

6. Educate

Many companies have the ability to create a client onboarding process. This is a great way to help new customers use your products and services correctly or to maximize the value that they are receiving. Customers love onboarding programs, too. According to Wyzowl research, nearly nine out of ten customers say that they are more likely to remain loyal to companies that welcome and onboard them. After onboarding is complete, your content marketing can continue to educate them.

7. Offer a loyalty program

According to Forbes research, nearly three-quarters of consumers believe loyalty programs are an important part of their relationship with brands. In addition, a third of consumers believe loyalty programs improve their brand experience. As a result, they can increase purchase frequency and spend.

Get Help Improving Your Digital Marketing

While customer loyalty is essential for overall growth, it's just one aspect of the equation. Stickiness can be affected by many factors, making it difficult to identify the right solution or diagnose the problem. With a background as a business consultant, I can help small and medium-sized businesses overcome these obstacles and grow stronger every single day. If you'd like help improving your digital marketing, contact me to arrange a free consultation.

You can also read this article on my website, 7 Effective Strategies For Increasing Customer Stickiness.

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