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The Importance of Customer Retention Strategy

Customer retention strategy is important because it measures a companies ability to hold on to existing customers over time. It can be impacted by factors such as new customer acquisition and customer's opting to cancel orders, subscriptions or terminating an agreement or contract.

Customer retention doesn't just happen, you need a solid strategy and hard work is required to earn the continued buy-in from key accounts in order to gain loyal customers. This can make a huge impact on sustained revenue growth and on driving continued client partnerships over time.

While customer acquisition is important for growth, meeting the needs of your existing customer base is critical. Neglecting existing customer's over the pursuit of new ones is a tricky balancing act for business owners and sales teams, but having a clear framework in place for customer retention will give you deeper insight and a roadmap ahead for success.

Why is a customer retention strategy important for my business?

  • Loyal customers are more profitable - Repeat customers tend to spend more and are also more inclined to try new products and/or services because there is an established trust. Continued focus on building a loyal customer base with trust and loyalty will see a steady profit growth over time.

  • Smarter marketing spend - Returning customer's are already familiar with your products and services so your targeted marketing for existing customers vs a new customer is lower. Existing customer's are brand aware and typically need less support in the buying journey so you can adopt a more consultative approach because there is an existing relationship.

  • Referrals are more likely - Word of mouth is powerful and comes from existing, satisfied customers who are truly your best source for new business. Customer's respect the opinion of industry peers or those around them which gives prospective clients the confidence to make a buying decision with you.

  • You gain valuable feedback - Loyal customers provide valuable feedback for your business and will tell you what is working for them but most importantly what isn't. They can also share vital industry or competitor intel and you can gain further insights on trends and customer pain points that you can help them solve in the future.

  • Quality vs Cost - Repeat customers are aware you provide solutions to their problems and are often prepared to pay a premium because the trust is there and a cheaper option could cost them more money in the long run. For example, if you are an independent contractor and provided advice that has resulted in significant savings, a retained customer is likely to support your business again, even if your fees are more expensive than your competitors’ as customers often associate higher prices with quality service.

Every business owner wants to grow their business and increase profitability which is why savvydesk.co.uk is helping smaller companies, startups, and entrepreneurs to work smarter, ease pressure, and save money during crucial periods of growth. Implementing a tailored customer retention strategy which works alongside customer acquisition should give you the foundations you need for ongoing success.

To find out how we can help you implement a framework for continued growth


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