What Is ‘Retention’?
‘Retention’ is essentially keeping existing customers already known to the business rather than continuously finding new customers. Although finding new customers and clients is vital for any business, it’s also incredibly important to keep existing customers. Retention indicates customer loyalty over a period and can be calculated using the following formula:
Why Is Retention Important for Businesses?
It’s often the case that retaining existing customers is much more cost-effective than seeking new customers. This is down to several different factors, examples of these include:
- Your brand is already known to the business, so brand awareness isn’t an issue or something you need to invest in.
- Existing customers who are happy with the product or service you provide are likely to recommend you to others.
- Existing clients and customers should already trust you and the relationship becomes a two-way thing that everybody benefits from.
Retention Vs Prospecting – Finding the Perfect Balance
Retention and prospecting are both vital and can massively affect the success or failure of your business. It might be that one of these is more relevant than the other depending upon your situation and circumstances. For example, small start-up businesses are likely to focus more on prospecting to grow their business. Whereas established businesses may have more than enough customers and need to focus on retaining them rather than acquiring new customers.
How Marketing Can Help to Retain Customers?
It’s important to have a comprehensive strategy in place for retention and marketing plays a massive role in this. There are a range of elements you must consider, and the entire customer/client experience directly impacts retention levels. Every single touch point must be well thought-through and properly reflect your brand values and ethos.
E-CRM journeys are a brilliant way of maintaining constant communication with your database. However, each communication must add value to avoid recipients unsubscribing and potentially damaging relationships. This is where data segmentation plays a huge role and can help to ensure that the right clients/customers receive the right message. Timing is equally as important so that the right message is delivered to the right audience at the right time.
We hope you’ve found this article useful and that it’s provided a deeper understanding of marketing’s contribution to successful retention. If you have any questions or would like more information, please don’t hesitate to contact our friendly team. If you would like to know more about how Search Buddy can help your business grow call 0113 467 5392.
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