4 Ways to Increase Customer Retention Rates
Management of customer retention rate is one of the factors to be considered for sustainable business growth. Before considering strategies that can help with the improvement of customer retention rate, there are a few questions that require some answers. Research from the Harvard Business School shows that a 5 percent increase in customer retention can increase the business profit from 25% to 95%. In that case, it is good to understand the meaning of customer retention rate.
Meaning of Customer Retention Rate
By definition, the rate of customer retention is how a given company can well keep its consumers for a long period of time. Keeping customers costs less than the rate at which new ones can be acquired. The bottom line is that revenue does not care whether it was saved or earned. There are various techniques that can help you keep your consumers. Some of them are backed up by case studies and academic research.
Sometimes it is difficult to retain consumers more so if they are not paying attention to your products. It requires a lot of hard work and techniques based on clear messaging and communication. Perhaps, good communication skills results in the creation of engagement of loyal customers. The following are the methods that can result in customers’ loyalty.
1. Stand for Your Values
There are possibilities that consumers will ignore your brand if your company does not stand for it. For example, consumers will have a strong relationship with brands and products that promote good values. This might be the primary reason for dealership customer retention.
2. Use Positive Social Proof
Positive social proof motivates most consumers. This is one of the strategies of getting customers pay attention to your brands. Positive social proof can be in the form of testimonies that make customers have a positive opinion about the company’s brand.
3. Invoke the Lifestyle of Customers
For the purpose of having successful dealership customer retention, it is imperative to incorporate the lifestyle of your customers in your business. This way you will be identifying your customers with your brands. Perhaps, the target customers can be reached by using crafted messages that describe their aspirations, pains, and goals.
4. Educate Your Customers
According to marketing research, sales is effective when you already have a strong relationship with customers. This comes with educating consumers about your brands. By educating consumers about your product, they will be in a good position to appreciate its value.
In conclusion, understand that different types of buyers exist. Some are conservative spenders, while others are attracted by the quality of the brand. In that case, you can also use the words that customers like to hear. Certain words will encourage a section of consumers to buy more than others depending on the item’s value to them in how it fits within their lifestyle.
Since our founding in 1991, AutoAwards has been widely recognized as the industry-leader in automotive and marine loyalty marketing, earning longstanding relationships with many of the industry’s most successful dealer groups and OEMs. AutoAwards understands the #1 predictive factor for dealer growth and profitability. Customer loyalty is the most successful way to build revenue. AutoAwards has always recognized the need for top notch, highly creative, effective loyalty strategies in large and small businesses alike. Contact us online to talk about dealer loyalty or call 302-696-6000.