Is Your Customer Retention Rate Acceptable? A Beginner’s Guide

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Is Your Customer Retention Rate Acceptable?

TradeWheel.com

4 min Read

Do you know a common mistake a lot of business owners and key decision-makers make? They are focused on attracting more customers while ignoring the existing ones. You cannot hope to satisfy others when those who are already a part of your venture are sidelined. Providing continued utility to the buyers is what keeps them interested in your brand. Otherwise, you risk losing your prestigious clients to competitors. It is time to take a step back and dedicate your marketing/promotional strategies to fulfilling the needs and wants of the existing buyers. Get your company's report and look at the customer retention rate. Ask yourself, is it high enough? What can be done to improve it?

What Do You Know About Customer Churn?

It is the opposite of customer retention, as it refers to the number of buyers who have stopped purchasing or availing of your products and services. Calculating the rate of customers who have switched to competitors and left your brand is quite simple. Choose a specific period and conclude the total number of clients who were present at that time. Find out how many out of those customers are no longer a part of your clientele. Divide the number of buyers who left by the total you had at the start and multiply it by 100 (ex-customers/total customers *100). Why do you need to calculate this rate? It enables you to identify potential threats from competitors and figure out problems with your business. Possible solutions can only be thought of once you have discovered the reasons behind such issues. It determines the future of the company as the decision-makers can devise policies accordingly.

Importance Of Retaining Customers

Retailers and suppliers often have a misconception that a current buyer will stay as long as the quality of their goods is promising. However, that is not the case because customers need to feel valued if they are going to stay with your brand for a long time. Let's look at the advantages of retaining clients for those still skeptical about this method of bringing in revenue;

·       Having a loyal customer base contributes favorably to the company's short and long-term profitability. These individuals are more likely to place more orders and support the launch of new products.

·        A prospective buyer interacts with thousands of brands every day but chooses only a few. Why? Clients and businesses must have somewhat of a connection that makes both parties feel respected. Stop worrying about acquiring new customers, and start developing policies to keep the current ones.

·        Have you ever heard of referrals? A fulfilled client will talk positively about your business with his/her friends, and they will tell their acquaintances. This is how mere word-of-mouth referrals from complacent buyers will bring in more sales and boost profits.

·        Customer loyalty is a priceless element for a growing business. These are individuals who give honest reviews to help you understand how to keep winning them. Once they see their issues being resolved, they will stay with you.

·        A venture can save a sufficient amount of money on marketing by improving its customer retention rate. The capital held can be diverted to the execution of other plans such as globalized expansion. Advertisements and publicity would still be needed, but not as vigorously.

Do you know how many aspects a business can cover by encouraging customer retention? You can develop new products, get sincere feedback, generate additional revenue, reduce costs, and build a lasting brand image. All of this has fruitful outcomes in both the short and long run.

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Why Are You Losing Customers?

As a business person, you need to start considering the buyer's perspective. Once you begin viewing your company from their eyes, all the problems with it will become visible. Here are the reasons behind a low customer retention rate;

·        Buyers need to feel more than a transaction for a business. You lose customers when they observe that the brand does not value them.

·        It also happens when a customer decides to quit the market. This means they are no longer included in not your target market.

·        A drop in the retention rate can occur if a competitor swoops in and grabs your customer using immoral practices. It is an ethical way indeed, so be careful.

·        A current client could pass away, causing the rate to fall. It is quite natural and something out of your control.

·        If your product or service is not up to mark in terms of quality and price, buyers are more likely to switch brands.

The result of a few factors seems inevitable, but what about the ones that aren't? You can surely take certain measures to tackle these issues to promote brand loyalty among your clientele.

How Can You Fix The Declining Customer Retention Rate?

The first part of any problem-solving approach is acknowledging the challenges. It makes the job of figuring out the solutions much easier. Let's discuss the ways of overcoming such difficulties:

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1.       Why are your customers leaving? Once you find the correct answer to this question and pay heed to their complaints, the rest would not hard. Get to the root of the problem and try to eliminate it to enforce efficient methods.

2.       Retention is about building long-lasting, profitable relationships with your customers. Don't consider them only as someone who pays for your goods. Find out your clientele's interests and think of ways of embedding them in your marketing strategies. Everyone has buyers, but what makes your offers unique and valuable can make a huge difference. Give exclusive deals to loyal ones and stay connected with them.

3.       Just allowing buyers to give feedback is not enough. Add convenience within the process by sending out or emailing questionnaires and survey forms. If a customer has placed online orders, call them to see if the delivery was up to mark. Pay close attention to the harsh comments as they fully explain the problems your clientele is facing. Incorporate solutions, and ask those buyers if they are satisfied now or not.

4.       All your policies should be aimed at optimizing the customer experience. This means making it easier for potential buyers to become a part of your business. The onboarding procedure should be not only understandable and straightforward As a supplier or wholesaler, but you can also sign long-term contracts with the customers as it binds them to stick with your business. Make those agreements worthwhile for them, and they will happily complete transactions with your company. Deceiving them into accepting your terms is not advisable as it is highly unethical.

5.       Focus on attracting the target audience as it will be beneficial in the long run. Create buyer personas to list the specifics of the kind of customers who will value your products. While someone who only places an order once is also helpful, those clients don't stay long. Hence, direct your marketing strategies toward the target audience, and continue to satisfy them to maintain strong relationships.

6.       Do you wish to keep winning the current and prospective clients? Give them incentives and deals they cannot resist. For instance, offer discounts if a client is buying goods in bulk and do not charge for shipping. It might seem a bit costly for the business, but its long-term returns are indeed promising. Customer loyalty is strengthened when you begin rewarding your buyers.

7.      Does it seem so hard? Maintaining a good customer retention rate and preventing it from falling ultimately contributes to improved profitability ratios of your company. A business is as good as the utility it provides to its clients. You will only grow and flourish by sustaining customers. After all, you also need to shift your attention to other problems. An easy way out is choosing Tradewheel.com, a globally recognized B2B platform, to represent you in the markets. We ensure your company's success by abiding by the guidelines discuss here. Pleasing your clientele is our duty, and we fulfill it effortlessly.

Final Words

Do you see? Running a business does not only involve attracting customers. You can expect someone to stay with your company if their expectations are not met. Being consistently good at what you do is what determines your venture's success. Nowadays, the B2B trade industry is establishing itself as a channel with endless possibilities. Getting on this ship with Tradewheel.com will make your venture a well-established one where clients are valued and respected.

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