Market musings

5 Customer Retention Strategies You Need to Know

by Nina Quasebarth
June 28, 2017

Customer retention has to be the top priority for any business. It takes a lot of time and money to attract new business, especially in the age of the web when consumers have more choice than ever and can readily find more alternatives to your product or service. Once you have landed a new customer, you need to nurture the customer experience (CX) to make sure that customer returns. Your best strategy for improving CX is better customer support and communications.

It can cost 25 times more to acquire a new customer than to keep an existing one. Research also shows that increasing customer retention rates by as little as 5 percent can increase profits by 25-95 percent. Amazingly, companies typically do a poor job of customer communications and service. With online support and chatbots, customer service has become less personal and less responsive, and consumers won’t hesitate to look to another company for a better experience.

Growing Demand for Faster Customer Service

The internet has changed how companies, and consumers, approach customer service. For retail purchases, for example, online research tools have become extremely popular.

To retain customers, you must provide the right information when they want it, and that can mean through a website or online exchange, or via telephone.

Here are some communications strategies to help you retain customers:

1. Better online supportStudies show that live chat, social media, and email are becoming the most common methods of contacting companies. One in four consumers say they used live chat to communicate with a company in the last year, and 73 percent said they were “very satisfied” or “satisfied” by the experience. The same research shows that 1 in 10 consumers used social media to contact brands in the past year. In fact, Twitter use for customer interaction has increased 250 percent in the last two years. Not surprisingly, online tools, especially live chat, are more popular with younger consumers. Providing better online support tools and ensuring you are responsive to customer requests can go a long way to keeping customers happy.

2. More online information to answer questions – A Forrester study shows that, for the first time, self-service has become more popular than assisted customer service, and 3 out of 4 consumers prefer to find their own solutions. To help customers, more companies are adding comprehensive FAQs and customer knowledgebase systems to their websites. Some brands also are setting up forums on which customers can share information to address their own questions.

3. Feedback surveys – Customers want to be heard, and surveys can be a great tool to share their opinions. Ask customers to respond to a simple survey when they make a purchase or afterward. Ask their opinions about new products. Make customers feel special as insiders to your brand to promote loyalty. Remember to use surveys both as an individual response tool, so you can take action when needed to address a problem, and for overall trend analysis to identify common customer patterns.  

4. Maintain a dialogue with customers – Tools such as satisfaction surveys are valuable for one-way communication, but customers want to feel they are more important to you than just a demographic. Build a rapport through online dialogue. Social media is a great tool for this. Sponsor Facebook and Instagram contests to attract new followers, and use social media to interact with those who comment. Be sure to provide personalized response and service wherever possible.

5. Offer telephone support – Above all, customers want immediate answers to their questions. Though many consumers prefer self-service, more than 68 percent of customer contact center interactions are via telephone, compared with 3 percent via social media. Failure to provide a timely response using online channels can lead to a 15 percent customer churn rate, while the telephone provides immediate response. Despite the growth in social channels, consumers want access to a customer representative and, 71 percent want access to telephone support.

Consumers Still Want the Human Touch

When it comes to service, customers still want to talk to a human being. A recent study by Verint shows that:

  • 80 percent want to speak to a human service representative rather than using digital self-service, and 83 percent believe that talking to a representative by telephone will always be important.
  • For simple questions and tasks, 64 percent are willing to use digital self-service, but 67 percent prefer human assistance for complex issues.
  • 90 percent of consumers are concerned about online privacy, which is driving more telephone support calls and increasing demand for personalized service by 54 percent.
  • 67 percent of consumers and 91 percent of companies feel that online customer support should be faster and more intuitive. That’s why people still rely on phone support.

It’s clear that to retain customers, you have to be able to offer fast, competent phone service in addition to information and support online.

For smaller companies, the idea of setting up a help desk to provide 24/7 customer support can be daunting. You can pay for an outside call center, but that would require additional training and the customer experience is likely to suffer. However, maintaining a 24-hour help desk by adding support staff can be even more expensive.

Increase Customer Satisfaction

Rather than investing in additional help desk overhead, you can use services such as Spoke to allow your current team to provide customers service. Spoke turns employees’ smartphones into a central business phone exchange, so incoming calls, including service calls, can be routed to any employee’s mobile phone. Using services such as smart directories and call context, your employees can handle customer service calls at any time from their smartphones. Not only does this strategy increase customer satisfaction, but it also puts your team in direct contact, giving them valuable insight about their customers. 

Customer retention is all about promoting customer satisfaction and effective customer communications.

No matter how good your online self-service resources are, there are times when customers want to talk to a live representative. With tools such as Spoke, you can provide telephone support at any time, ensuring customers get answers to their questions quickly, without adding overhead to your operation.

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