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Five proven customer retention strategies

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June 24, 2021
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Photo by Zan on Unsplash

What's the secret to a successful, growing business? Customer retention, which is even more important than new customer conversion. By ensuring a solid foundation of happy, engaged users, your company can expand its brand and customer loyalty to new heights.

The best part of customer retention is that you don't have to reinvent the wheel. There are so many tried and true methodologies, like this comprehensive list from Hubspot, for example. And we've narrowed things down to five essential strategies, which are described below.

1. Identify what specific problem your company solves

The first step in creating a loyal base of recurring customers is to settle on a specialty and do it better than everyone else. Too many new businesses try to solve a whole host of problems instead of narrowing it down to one thing and doing it really well. 

A digital product or service should make things easier for the user instead of adding additional steps or complications to a process. Potential customers will be able to spot your effort and expertise, lending credibility to your business.

2. Make things simple for new users

It all starts with your onboarding processes. We covered common onboarding and signup pitfalls in an earlier blog, which you can view here. Basically, don't make it overcomplicated by asking for vast amounts of personal information. And definitely don't ask for credit card details when someone signs up for a free trial. 

When you're presenting signup forms, don't overwhelm the user with extreme UI elements. These forms should be bare-bones since they are a means to an end - a successful signup.

3. Communicate effectively

Keeping open lines of communication cannot be stressed enough. Few things kill customer satisfaction more than an extended response wait time, for example. Customer relationship management tools come in handy here. Courteous email and phone support, with a communication calendar for tracking messages, will improve the customer experience.

Be accountable and apologize when you mess up because everyone - and every company - makes mistakes. The best way to handle a mishap is to be upfront and honest with the customer. Let them know what went wrong, take responsibility for the problem, and inform them of how you're addressing the issue.

It's also crucial to thank your customers and let them know they're appreciated. When a company expresses its thanks in a form other than a mass email blast or generic purchase confirmation, it goes a long way. So include some personal information with a thank you note, like the person's name and how long they've supported your company. They will notice these personal touches, which leads to our next customer retention strategy.

4. Engage with your customers 

Educate your customers and turn them into confident and skilled users. Last week, we talked about the importance of a well-kept knowledge base, which is an excellent way to empower users. Most people prefer the do-it-yourself route, so you must include a help center and educational resources informed by target user groups, ux copywriting, and background research.

It would help if you also tapped into the vast resource that is your user base. No company thrives by staying stagnant. Instead, a digital product or service should be conducting regular self-assessment and work to improve their offering. Customer surveys and even one-on-one conversations are great ways to discover what's working and what isn't. Then you can iterate on your approach and update features where necessary.

5. Offer rewards

Treat your customers because people love free stuff! Some companies will send impromptu gifts, promotional codes, or discounts to people just for being loyal customers. Another option is to hold a special contest or prize drawing, which will bring more attention to your company.

These are special touches that customers will not soon forget. They also promote positive word of mouth, encouraging users to recommend your product to others. Always remember that people respond to incentives.  

3Digit is a small agile product design shop based outside of Baltimore, MD. We focus on designing user-centered digital products for mobile and web applications, as well as physical prototyping for early-stage startups and entrepreneurs. Our approach relies on research and rapid prototyping to help businesses turn their ideas into reality.