A lost customer is painful for your business – both for your bottom line and your ego.
The importance of customer retention isn’t to be taken lightly. That’s why, in this article, we take a look at how to use exit interviews and surveys to improve customer retention.
You may be wondering, “What’s the purpose? After all, they’ve already left my company?”
The purpose of conducting exit interviews and sending surveys is to find out what you did wrong, why the customer left the business, and how you can improve so you keep more of your current customer base.
So, let’s get to it.
Customer Retention Stats
According to Score, the following can be said about an unhappy customer:
For each one of your customers who complains, 26 remain silent.
The average unhappy customer tells eight to 16 people about the bad experience.
91% of unhappy customers will never buy from you again.
If you try to resolve a customer’s complaints, 82-95% percent of them will stay with you.
It costs you about five times as much to attract a new customer as it does to keep an existing one.
Those are some heavy prices to pay for lost customers. Now, wouldn’t it be nice to know why they are leaving and what you could do differently in the future to prevent such a loss?
Do you know the value of loyal customers? Have you ever created a strategy built around keeping those customers while maintaining and building your relationship with them? Have you explored a customer retention strategy?
If not, we encourage you to do so. Retaining your current customer base is often referred to as the low-hanging fruit. What do we mean by this?
The fruit that hangs low is easily reachable, and it requires minimal effort to pick it. The same can be said for your current customers. They can be won or persuaded to stick around with little effort. Now, that doesn’t mean no effort.
Because you have to invest a little to get a lot, and we want to help you with your strategy, we’re going to look at customer retention stats, a study and best practices for 2016.
Customer Retention Stats
To drive home the importance of customer retention, here’s a list of stats:
It costs 500% more to acquire a new customer than it does to keep a current one. ~Destination CRM
It costs 16x more to bring a new customer up to the same level as a current one. ~Marketing Tech Blog
It’s cheaper to retain a customer than to get a new one. ~Econsultancy
The average repeat customer spends 67% more in months 31-36 of their relationship with a business than they do in months 0-6. ~Bain and Company
47% of customers would take their business to a competitor within a day of experiencing poor customer service. ~24/7
97% of consumers said they are somewhat likely to become more loyal to a company that implements their feedback. ~Apptentive
81% of consumers are more likely to continue doing business with brands that offer loyalty programs. ~Bond Brand Loyalty
By definition, customer retention is the activity a company undertakes to prevent customers from defecting to alternative companies. Successful customer retention starts with the first contact and continues throughout the entire lifetime of the relationship.
Since customer retention is one of the most powerful ways to grow your business, we’re here to tell you that it is doable. The best part about customer retention is that you already have a relationship with these customers because they’ve already made at least one purchase from you.
They know your business and a little about at least one of your products. Now, it’s up to you to convince them to move forward with your business again and again. To help you do that, here’s how to improve customer retention with these five tools.
#1: Build Relationships
The most important part of your customer retention strategy is relationship building. Once your customer makes the first purchase, it’s time to personalize the message.
This allows you to tailor information to each customer’s needs.
For example, let’s say you purchase a pair of jeans on an eCommerce site. That company may then send you an email with product recommendations that might go with your new pair of jeans.
Alternatively, you might sell vacuum cleaners online. You could continue to build the relationship by offering emails that include cleaning tips and product recommendations on vacuum cleaner bags.