What sales strategies are applied to maintain a good conversion rate for your business? Have you ever stopped to analyze the costs of retaining consumers versus the investment amounts needed to reach a new audience? It is in light of these questions and considerations that a fundamental concept for a company emerges: customer retention.
It basically redirects attention to the implementation of actions capable of maintaining an organization's consumer base in the long term . It needs to be understood in depth and constantly monitored and improved. But how do you do it? How do you measure it? What is its importance for sales figures? Find out this and much more in the text below. So, keep reading and check out Maxbot's blog!
What is customer retention?
Customer retention is a practice aimed at building a relationship between brand and consumer, which increases the length of stay and connection. In other words, it is related to preserving the audience base that interacts with and purchases the products or services sold by your company.
This action is considered effective when the customer identifies your business as a place capable of meeting expectations and demands, perceiving value in what is delivered and also in the relationship and interactions themselves. But, at this point, you may be wondering if this is not the same definition used for loyalty, right?
The truth is that these two topics are architects email lists different, despite being related. This is because, while loyalty focuses on maintaining this dialogue and transforming users into true brand promoters — leaving aside competitors when considering authority and relevance — retention aims to ensure repeat purchases, maintaining a solid profit margin in the long term.
To read later: Customer Relationship – learn how to build and maintain it!
How important is customer retention?
Of course, having a portion of active users who are attentive to the business is ideal, however, the importance of retention goes beyond that, as its main result is the recurrence of their acquisition .
Another essential factor that helps you understand the impact of this parameter is related to the fact that acquiring new buyers is proven to be more costly than retaining the portion of customers who already consume your services. Therefore, investing in this type of process can and should be one of the top priorities for your sales department.
Imagine, for example, a scenario where you offer product delivery via subscription. This recurrence is essential to guarantee positive revenue, since it is anchored in the continuation of this cycle. However, anyone who thinks that this tactic is restricted to these business models is mistaken.
All companies, regardless of niche or size, can take advantage of the benefits of increasing profit margins, boosting brand promoters and ensuring a good return on shares.
What metrics should I use to monitor retention?
The most common metric is the churn rate . This performance indicator turns into numbers the percentage of customers who stopped buying from your business after a certain period of time, exemplifying the degree of turnover and abandonment caused by the services or products.
To define this, the number of consumers who did not continue making purchases in a given period is determined. This number is then divided by the total number of customers at the beginning of the period of this count. This result is then multiplied by one hundred, as in the following example:
Example: Let's say you have an e-commerce store selling dermocosmetics. At the beginning of the first half of the year, you had 2,000 customers. Six months later, however, you still had 1,960 customers on your list.
Your churn rate would be 40 (audience that stopped consuming) ÷ 2,000 (how many you had at the beginning of the evaluation) × 100 = 2%. Therefore, 2% of your consumers in this period stopped making purchases, impacting retention expectations.
How to increase customer retention? See 5 steps!
It’s time to get down to work and develop the methodologies that will help you create, strengthen and implement good customer retention in your store. Check out the step-by-step guide below:
1. Know your consumers in depth
Retention is linked to a good understanding of the user's demands, expectations and needs. Therefore, keep a constant analysis of this profile or even create questionnaires and forms that help you understand the main desires and points considered crucial for the moment of purchase decision.
2. Invest in modernizing and improving service channels
What are the chances of maintaining a customer base when the service channels offered are precarious and inaccessible? Almost zero, right? And we know that, given the Brazilian market and trends, communication methods such as WhatsApp are emerging as the most used by a large part of the population.
In this sense, there is nothing better than using this resource to reach users more accurately and assertively.
In addition, strategies such as chatbots , which provide automation and scalable quality service, are great allies in maintaining relationships with users , bringing agility, constant availability and optimization of the responses given, increasing satisfaction levels.
3. Invest in personalizing the journey with follow-up
Applying follow-up , a type of “monitoring”, makes your target audience feel seen and considered. Then, based on the data and references collected when creating profiles, you offer solutions, products and services that are consistent with the needs identified, bringing a personalized tone to the actions and communication outlined.
Offering good solutions to a customer you already know is a great strategy. With that in mind, learn how to build an offer that is IMPOSSIBLE to ignore with the video below:
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4. Provide good after-sales service
The moment of conversion is not the end point of your sale, after all, this cycle can and should be continuous when viewed through the lens of customer retention assessment. Therefore, good after-sales service reinforces the brand's positive image among customers and is decisive when considering whether to return for new purchases.
5. Track the results
Work with smart data, numbers, and accurate and assertive information. To do this, closely monitor the performance of your sales and service teams, identifying flaws, limitations, and improvements that can be applied to improve the purchasing journey . Therefore, enable tools, build good support, and have your consumer as the main focus of the business.