Why customer retention matters?

Affortability

Cost to retain an existing customer is always lower than acquire a new one. According to the Harvard Business Review, it is 5 to 25 times more expensive to acquire a new customer. Also, an existing customer is 60 to 70% more likely to purchase from you again while there is only 5 to 20% that a new customer will buy from you.

Increase revenue

By improving customer retention rate by 5%, you could increase the revenue of your company by 25 to 95% as it’s easier to sell to an existing customer than to a new customer.

Lower customer acquisition cost

Word of mouth marketing is powerful. By having more loyalty customer, the chance of your products or services being recommended to their friends is higher. Due to this group of customers are those who love to buy from you, the convicing power to convert a potential customer to customer is higher.

How to improve customer retention?

All you need to do is build relationship with your customers.

• Be accessible – Build trust with customers. People tend to purchase from a seller who they trust the most.
• Personalise the customer experience – Interact with each of them differently based on their product variety, location and purchase behaviour.
• Ask for feedback – Always has the urge to know more about your customer especially information that you couldn’t get from the sales data.
• Loyalty program – you do not need to have a very fantasy loyalty program, a simple program by offering some coupons to loyal customer with high purchase frequency will make them keep purchase from you.