You’ve successfully closed deals and hit your sales quota. Now what?
Your first thought may be to repeat the process and bring in new sales again. But there’s another factor that’s arguably more important than closing your next sale: making sure the new customer is satisfied and continues using your product.
New customer acquisition is up to 7x more expensive than retaining existing customers according to White House Office of Consumer Affairs, while the probability of selling to new prospects is up to 35x lower (Forbes).
In this article, we’ll discuss actionable tips on how to retain customers in the long run and how monday CRM can help you in the process.
What is customer retention?
Customer retention is the ability of a company to retain its customers over a time period. It is influenced by customer churn and customer acquisition. The rate of customer retention (CRR) can be calculated with this simple formula:
CRR = [(CE – CN)/CS] x 100
Here CE is the number of customers at the end of the period, CN is the number of customers during the period, and CS is the number of customers at the start of the period.
Understanding customer retention is important because it’s a key metric that determines the long-term success of your business. Research by Bain & Company suggests that just a 5% increase in retention can improve a company’s ROI by 25% to 95%. It’s much easier and cheaper to sell to existing customers because you can form a strong relationship with them and truly understand their needs. Satisfied customers can often lead to referrals, which brings in even more loyalty and retention.
6 solid ways to increase customer retention
Now that you know the importance of customer retention, let’s look at six ways customer-facing teams and sales professionals can retain more customers and increase revenue in the long run.
1. Communicate regularly across channels
A report by McKinsey shows that customers want—and expect—to engage seamlessly across multiple channels. And 72% of businesses that did so saw an increase in profits. These include common digital channels such as social media and email as well as live chat, mobile apps, and e-portals.
Keep in touch with customers after you’ve closed deals. Instead of waiting for them to contact your business again, take the initiative to actively engage with customers. For example, you can send them resources to make their product experience smoother or if your company has an event planned, send them announcements.
Take the time to learn which channels your customers prefer and communicate with them regularly without waiting for them to approach you first. Here’s a great example from an account manager at SEMRush using email to initiate communication with a new customer.
It’s also crucial for these interactions to be personalized. For example, you can send content personalized by a specific industry and address unique pain points rather than sending the same resources to every customer.
2. Track performance metrics & monitor customer activity
Metrics allow you to effectively measure and understand customer satisfaction, so you can make informed decisions to improve customer retention. There are different metrics and KPIs, apart from retention rate, that you should track. Here are a few of them:
Customer satisfaction metrics such as Customer Effort Score (CES), Customer Health Score, and Net Promoter Score (NPS)
Social media engagement
Brand’s search engine rankings
Reviews on public sites
Monitor customer satisfaction, observe how customers interact with your business, and find out ways to optimize the sales cycle. For example, if a customer post complaints as comments on your company’s social media post, your business representative can engage with them via DMs and direct them to customer support.
3. Educate your entire team on good customer service
To improve customer retention you need to make sure the whole team is team aligned with the goals you’ve set. Make sure everyone is on the same page and educate them on the importance of customer retention. Provide them with special training on how to improve customer experience and build trust.
If necessary, host training sessions or provide incentives for up-skilling. Guide them on how they can re-engineer customer interactions to retain them. It’s also important to constantly analyze how your sales reps are doing their job. For example, you may notice that they are hurrying up during the onboarding process, but this may negatively affect retention rates. So, you may need to interfere and lay out a process for better onboarding. monday CRM comes with features to help you with effective customer onboarding.
4. Manage expectations
Clearly define customer expectations in the early levels of the sales cycle. Give them a clear understanding of what the product is (and isn’t), how they can reach out to you in case of queries, and what the average response time is. This is a step you can implement during onboarding or as early as the first interaction with a potential client.
Companies have a tendency to over-promise early on in the journey. Remember to keep your goals attainable and deliver exceptional customer experience over time.
5. Leverage data from churned customers
Despite all your best efforts, it’s inevitable that some customers will leave. The goal is to discover why past customers moved on and uncover possible problems in your sales process. Getting feedback from lost customers is tricky. You can try reaching them right when they are about to churn or right after.
Here are a few ways you can collect feedback from churned customers:
Send out a survey or poll asking them about their experience (exit surveys)
Send out interview requests to clearly understand why they’re leaving
Trigger an automatic feedback form as soon as the customer cancels
Although the responses might be few, they will have valuable insights which you can take action on. Here’s a great example of a short feedback form sent by Baremetrics. This off-boarding survey is short and captures the attention of the user.
6. Reward your best customers
Customers who stay with you longer deserve to be rewarded and recognized. For B2B companies, rewards can come in the form of discounts over time based on the length of the service contract. You can also offer referral programs or access to higher levels of service.
Get to know your customer, what experiences they want, and what drives their loyalty. Then, come up with a rewards program that best suits their needs. This strategy is great for converting long-term customers into brand advocates that bring in referrals.
Retain more customers with monday CRM
To put the above customer retention tips into practice, adopt a CRM system that helps you with customer relationship management and post-sales activities in one centralized place.
The monday CRM allows you to monitor metrics, visualize the results of all customer touchpoints, and make this information accessible to every member of your team. With one place to compile and track all your customer data, it’ll be easy to create actionable customer retention strategies.
You’ll also get access to features that help you personalize interactions and improve customer satisfaction — all of which directly contribute to increased customer retention rates.
Real-time dashboards to quickly identify opportunities for up-selling / cross-selling and discover customers with churn risk.
Email integration to log sent emails, keep track of interactions, and use our personalized email templates to save you time.
Activity management to ensure all meetings, calls, and other activities are logged so that critical information can always be easily retrieved.
FAQs
1. What is a good customer retention rate?
The ideal retention rate would be 100%, which means you don’t lose a customer. However, this number is not realistic in most cases. The average customer retention rate for the SaaS industry is 35%, according to a Mixpanel report.
2. How to calculate customer retention rate?
To measure your customer retention (CRR) over a period of time, find out the total number of customers at the start (CN), at the end (CE), and customers acquired during the period (CS). Then use the formula: CRR = ((E-N)/S) x 100.
3. Why is customer retention important?
Customer retention is important for the long-term success of a company. It is much cheaper and easier to retain existing customers than acquiring new ones. Retention rate is also a measure of customer satisfaction and customer loyalty.
Good retention rate = sustainable growth
Driving customer retention will allow your business to stand out in increasingly competitive verticals. For this, you’ll need to track and manage every aspect of the sales cycle, customer data, and communications in one centralized place. monday CRM will help you aggregate all these processes and more to ensure you’re providing a delightful customer experience at every touchpoint.
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