Most retail businesses focus their marketing efforts on the goal of attracting new customers. But what about the customers that are already familiar with your store?
Customer retention is massively overlooked in most businesses, but it can help you beat your competition. Regardless of how much revenue you earn every year, by shifting your focus to customer retention, you can increase profit up to 25-95%.
Customer retention is easier and more cost-effective than acquiring new customers. It assists you in scaling your retail business revenue without spending thousands of dollars on marketing. According to the statistics, 65% of a company’s business comes from existing customers. So, what’s stopping you from shifting your focus to customer retention in 2024?
This blog will help you learn what retail customer retention is and share unique customer retention ideas that can help you accelerate your business growth.
What Is Retail Customer Retention?
In simple terms, customer retention or retail customer retention is the act of keeping your first-time customers returning for more. This is a major concern of every business owner. You always want your existing customers to buy more products from you. The more customers repeatedly purchase the more you can drive revenue at your retail location.
Top Reasons Why You Need to Focus on Retention
Did you know that customers’ value expands beyond what they spend on your business today? They have future value depending on how you engage and retain them for the years to come. Their value depends on your successful retention.
Here are the top reasons why customer retention should be a priority for your business in 2024.
1. Cheaper Than Acquiring New Customers
Acquiring new customers not only takes time but has less ROI compared to retaining customers. This is because selling to a person who’s already familiar with your brand is easier than selling to a new customer. There is a 70% chance that an existing customer will buy from you again, as opposed to the new prospect.
2. Retaining Customers Powers Business Growth
Scaling your business gets easier when you have a high customer retention rate. As your customers become loyal to your brand it’s more likely that you will get free referrals through word of mouth. This not only grows your business but also turns it into a consumer-first brand.
3. Save More on Your Marketing
When you start getting customers through referrals and your customer base gets familiar with your product or brand, it’s smart to shift your focus to retaining them. Rather than using up your marketing budget on ads you can put some money and effort into retaining your existing customers. You can set up a loyalty program, and run email marketing, and promotional offers to keep customers coming back for more.
7 Unique Customer Retention Strategies to Help You Sell More
There is a saying, “Make new friends, but keep the old, one is silver, the other is gold.” This adage taught us that while making new friends is fun and exciting, fostering old friendships has its own value.
The same goes for customers. While acquiring new customers has its importance, existing customers can hold more value. But often store owners pay more attention to the new customers, which significantly drops their customer retention rate.
According to the 2020 roundup of Statistica’s industry retention rates, the retail industry retention rate is fairly low compared to any other industry. On average only 63% of the customers in the retail industry purchase from the same retail store. The reason for low retention is due to the high competition. Customers are bombarded with a variety of choices, getting more options to switch from one brand to another.
So, how to retain your customers?
Fortunately, there are many ways that can help you stand out from the competition and keep your customer base happy. In 2024, you can implement the following 7 ways to make your business thrive.
1. Create a Customer Relationship Marketing Strategy
Many small businesses in the retail industry lack focus on creating a customer relationship marketing strategy. The customer relationship marketing strategy is set to build the credibility of your company’s brand. It is all about centering your business and marketing efforts around customer relationships, needs, and loyalty.
By creating a customer relationship marketing strategy, you can build long-term relationships with customers to increase customer lifetime value.
2. Confront Customer Churn
No technology can help you read the minds of your customers. But what if you can become aware of the customer churn before it happens? Modisoft Insights can help you notice customer behavior and buying patterns.
By monitoring your customers’ purchasing trends, you can watch out for common churn signs such as spotty purchase patterns or a history of customer service complaints. This can help you reach out to your customers by offering special discounts, customer feedback, or follow-ups to keep your brand top-of-mind.
3. Start Customer Loyalty Program
Customer loyalty programs are one of the most common yet successful retention strategies. These strategies not only incentivize customers to share your product and services with their acquaintances but also keep your most loyal customers happy.
Before creating a program for your business, survey your top customers to know what makes them feel most appreciated. Once you are done with the survey, focus on creating a stellar loyalty program. Here, Modisoft Loyalty can help you create exciting loyalty and promotional campaigns that can increase customer engagement.
4. Focus on Improving Customer Experience
Customer experience is the key to retaining customers. By providing unforgettable customer service you stay in the customer’s mind. This is an opportunity to differentiate your brand from the competitors and attract repeat business.
But how can you deliver an unforgettable experience to your customers? At this stage, retail businesses can focus on speedy response time and error-free shopping and delivery experiences. You can use Modisoft All-Purpose POS to manage your orders more conveniently.
5. Send Personalize Offers
Step into your customer’s shoes and feel how difficult it is to make a choice when you’re bombarded with hundreds of advertisements and promotional emails every day. You’ll get irritated and ignore them unless they are not relevant to you.
So, how can you stand out? Target your promotions to feel like you’re specifically addressing that person. This will make them feel valued, and your offer will stand out from the competition.
6. Make Your Existing Customers Feel Valuable
Making your customers feel valuable is one of the best customer retention strategies that you can use in 2024. By making your customers feel appreciated and valued you can provide in-store pickups, special discounts on birthdays, and categorize loyalty cards.
For example, if your business is a bakery or café, you could target your most frequent customers and send free cakes on their birthday. This will help you to create a bond with your clients and keep them coming back for more delicious treats.
7. Utilize Technology
Make your customer’s shopping journey easy by utilizing technology. More retail stores are now shifting towards modern apps, and it’s passed the time for you to join the bandwagon. From getting a frictionless point-of-sale system to creating a customized app, you need to utilize modern technology to enhance your customer experience.
Cartzie gives you the flexibility to create customized apps and provide a seamless online experience to your customers.
FAQs
1.How to Calculate Customer Retention Rate?
The formula to calculate the customer retention rate is [(E-N)/S]x100. Where E represents the number of customers you have at the end of the period, N represents the new customers you gained during the period, and S represents the customers you have at the start of the period.
2.What Builds Customer Retention?
The key to building customer retention is to collect valuable feedback from your customers and keep addressing pain points by improving your customer service.
3.What Is the Best Customer Retention Strategy?
The best customer retention strategy is to focus on making your customers happy. Give them easy access to reach you and take feedback on every purchase they make. Don’t miss the opportunity to reward them with coupons and exclusive perks that you can easily create with Modisoft and Cartzie.
