Customer retention refers to the ability of a company or product to retain its customers over a specified period. A high customer retention rate is positive, as this means customers tend to return and continue to buy. Therefore, a strong retention strategy is key to growing a business and increasing revenue.
Organisations may argue that customer acquisition, the process of generating new customers, is just as important as maintaining existing customers. The downside to this, however, is that it is much more costly to sell to a new customer than it is to an existing customer – six to seven times more! In comparison, appealing to existing customers costs less in terms of marketing, but has also been shown to result in higher value purchases and conversion rates. According to Invespcro, increasing customer retention rates by 5% can increase profits by anywhere from 25% to 95%.
Customer retention is not only profitable for an organisation, but positive for brand reputation. An organisation’s consumer base could grow considerably based off of feedback and reviews from existing clients. The prospect of higher profitability and a more positive brand reputation demonstrates the importance of a strong customer retention strategy – what can you do to further enhance yours?
To initially improve customer retention, organisation’s should look at the consumer journey. Gathering data and insight into how customers use your website or business is extremely valuable – you’ll be able to map out their buying process and what leads them to a conversion. Understanding the customer journey can help you optimise each stage that they go through, so when they return, their experience is even better.
The customer experience is also heavily impacted by employee behaviour and knowledge. Your employees are your customers’ first point of contact, so sufficient product knowledge and customer service skills are essential to driving a sale. Therefore, training is a key factor within a customer retention strategy, as developing your employees’ skills will ensure customers return – 73% of buyers point to customer experience as an important factor in purchasing decisions.
Chick-fil-A was recognised as the most polite fast food chain in the US, due to improving the customers’ drive-thru experience by training staff to say ‘please’ and ‘thank you’. Analysts have said that customer service is key to Chick-fil-A's success, as superior customer service drives higher sales per unit, contributing to the chain's ability to generate greater revenue than chains with more than twice as many US locations, such as KFC, Pizza Hut and Domino's.
It is evident that online training is becoming the obvious option for businesses – it’s cost effective, convenient and can be delivered continuously, as opposed to one-off training events that do not demonstrate return on investment.
Wranx embodies the features mentioned above; delivering daily learning via Spaced Repetition (which improves knowledge transfer). An online platform also ensures that training of the same quality is distributed to teams that are geographically dispersed, which is common in any business. This consistency is vital to improving customer experience.
The need for on-demand performance is also growing, as it’s not always efficient or convenient to organise training days on a regular basis. The accessibility of Wranx’s Media Hub can help combat this: the Media Hub is an online repository that can host learning resources such as videos, PDFs and PowerPoints. This has proved extremely beneficial to The North Face, who hosts product videos and the Explorer Magazine. Having these resources accessible to learners helps them understand more about the brand and become passionate about it. These workers will likely have a personal investment in their work, which will lead to an improved customer service experience and positive representation of the brand.
Evaluating your current training approach could have a significant impact on your customer retention strategy. Digital learning is key when educating your employees around your customers, and online platforms, such as Wranx, ensure high-quality training is filtered through stores continuously, maintaining a consistent store experience for customers.
By shifting the focus inward and developing the skills of employees, businesses will be able to increase customer retention rates and drive profit, ensuring long-term sustainability.