Customer retention costs less than customer acquisition and delivers higher results in terms of revenue. To ensure an expanding customer base, CMOs need to look for ways and means to increase excellence in engagement with existing customers. This would be the cheapest and fastest way to boost their brand.
A study by Invesp in Customer Acquisition Vs. Retention Costs – Statistics And Trends says that brands can find 60-70% more opportunities to sell their services to existing customers than new customers, which remains 5% to 20%.
Brain & Company also highlights in its blog that a slight increase in retention efforts can boost business profits significantly, from 25% to 95%.
In 2024, it will be imperative for companies to focus more on retaining customers over acquiring new ones.
So, aligning the marketing budget to achieve higher customer retention will reap much higher marketing returns. how do CMOs do this effectively? Here are some ideas:
Customer Retention Strategies to Plan in 2024
Invest in Tech-tools-AI, Automation
Improvements in website functions, customer service, and email platforms can greatly impact customer retention rates.
AI-based chatbots and other automated chat support can quickly get customers’ attention and resolve their issues.
Customers expect to chat with their brands closely about products and how they can benefit them. Live chat support can be their immediate point of contact for any product-related query. This way, AI is integral to providing a great customer experience, adding to customer retention.
Similarly, quick-response emails with personalized content, personalized product recommendations, and timely purchase reminders are all AI-driven functions that keep customers engaged.
Automated services like regular notifications on apps, websites, and mobiles cost less than traditional customer services.
Calabrio Research 2022 finds that 97% of consumers agree that customer service interactions impact whether to stay loyal to a brand or not.
In fact, they are more scalable and measurable. Marketers can identify the value of retention rates that will drive growth.
The same study by Invesp has also mentioned that 44% of companies prefer using mobile apps, and 52% go for emails to retain their customers.
So, when these customer services are aligned and deliver solutions correctly, positive customer experience (CX) boosts loyalty, followed by revenue generation at scale.
Include Customer Loyalty
PWC’s report on Customer Experience finds that 32% of customers would stop doing business with a brand they had even a single bad experience with.
49% of customers say they’d leave a brand if they lost focus.
Brands won’t let customers churn out even if customers have high expectations.
Many companies have practiced discounts or referrals as incentives for loyal programs, increasing investments to boost profits.
Now that brands have to do it while keeping cost value in mind, they can develop use platforms that give insights into customer behavior and buying patterns.
These analytics will help marketers develop cost-effective reward programs and satisfy customers throughout their buying cycle.
Predictive analytics combined with personalized campaign automation helps companies increase customer loyalty.
CRM tools can also help to gain customer data. Based on this data, marketers can prioritize rewards and perks for customers.
PwC further finds that human interaction matters today. And 82% of U.S. and 74% of non-U.S. consumers want more human interaction during service calls.
So, it becomes crucial that technology supporting human interaction works seamlessly across platforms.
These ways keep customers actively associated with the brand to gain more experiences as their expectations extend each time.
Include Personalized Customer Experiences
Personalized content creation that caters to individual customer will keep them engaged, increase their experience levels, and boost loyalty to the brand.
Personalization in SMS notifications, ads, push notifications, and product recommendations based on customers’ buying patterns will boost retention rates.
As a result, they will make repeated purchases and may even add further recommendations. This may benefit brands by getting them more potential customers, thus reducing acquisition costs to some extent.
However, brands must consider that if customer experience isn’t a big part of their retention strategy, their efforts may be unsuccessful.
To prove this, here are some stats that says:
- The Emplifi report on the Impact of CX on US and UK Consumers in 2022
- finds that 61% of consumers will pay approximately 5% more if they experience positive customer experience.
- Zendesk CX Trends 2022 finds that 81% of customers believe that a positive customer service experience increases the chances of making another purchase from the same brand.
- Salesforce Report also mentions that 88% of buyers believe that customer experience matters equally with a company’s products or services range and quality.
As companies gear up their digital marketing plans for 2024, there will be conditions where acquiring customers will necessitate incremental investment in MarTech.
That will pay off in the future since customer acquisition is critical for companies to expand their customer base and revenue.
However, customer retention offers companies and customers a more cost-effective, reliable, and profitable pathway.
The retention process will help marketers to be consistent with their marketing activities by integrating new marketing technologies, software, and platforms.
This way, marketers will be able to build a strong customer base and boost revenue along with marketing ROI in efficient ways.