Acquiring a new customer is always an exciting milestone for businesses. However, it’s important not to overlook the value of existing customers in the pursuit of new ones. Neglecting customer retention can be a costly mistake.
Research has shown that providing an excellent customer experience is a competitive advantage that can drive sales and lead to referrals. In fact, a study conducted by The New York Times found that 65 percent of companies’ new business comes from referrals. Here are some eye-opening customer retention statistics:
- Acquiring a new customer can cost five times more than retaining an existing one.
- 73% of consumers consider customer experience a critical factor in their purchasing decisions. If they have a negative experience, 59% will walk away, and 17% will walk away after just one bad experience.
- Loyal customers are more likely to repurchase, forgive mistakes, refer others, and try new offerings.
- 51% of B2B companies avoid vendors after a poor customer service experience.
- Lack of speed in interactions with suppliers is a top pain point for B2B decision makers, mentioned twice as often as price.
To improve customer retention, it’s important to track and analyze the Customer Retention Rate (CRR). CRR measures the percentage of customers who continue doing business with you over a given period. The formula to calculate CRR is ((E-N)/S) x 100, where E is the number of customers at the end of the period, N is the number of new customers acquired, and S is the number of customers at the start of the period.
The goal is to keep the CRR as high as possible. According to Omniconvert, for most industries, “the average eight-week retention is below 20 percent. For products in the media or finance industry, an eight-week retention rate of over 25 percent is considered elite. For the SaaS and e-commerce industries, over 35 percent retention is considered elite.”
To combat the loss of B2B customers and keep them satisfied, it’s important to implement a solid customer retention strategy. Here are some effective strategies:
- Set clear expectations: Avoid overpromising and under-delivering. Be transparent and straightforward in your communication, ensuring that you can meet customers’ expectations.
- Stay in touch: Keep your current customer base informed about promotions, discounts, product updates, and reward programs. Even if these efforts don’t immediately drive sales, they help maintain brand awareness and loyalty.
- Invite customer feedback: Encourage customers to provide feedback and listen to their concerns or complaints. This personalized approach helps build long-term relationships and shows customers that their experiences and needs are valued.
- Conduct customer surveys: Use surveys to gather statistical insights about your products, services, and specific changes. This helps you better understand customer needs and preferences.
- Utilize traditional mail: Stand out from digital channels by sending handwritten notes expressing gratitude and appreciation to your customers. This personal touch can leave a lasting impression and strengthen customer loyalty.
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