5 Customer retention mistakes to avoid (and how to solve)

customer retention mistakes to avoid

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Customer retention mistakes are a cost. We have already said how much customer retention is valuable for any brand.

It helps them build loyal relationships with customers, making them more conscious about their opportunities, goals, and lacks. A brand should not underestimate the customer retention process because it makes it easier to have a loyal base.

However, like everything in life – and business – there is the other side of the coin.

Customer retention brings benefits, but today we will warn you against the five worst mistakes you could make to vanish your efforts.

Why customer retention mistakes are a cost

Customer retention is the process of engaging your existing customers to keep buying your product or service.

To do so, you use your resources to make sure the people that already know you and trust you keep being your clients. They are loyal customers now, and you don’t want to lose them.

If you work well, customer retention is the confirmation of a strong relationship with your customers.

A healthy relationship could turn into more sales and recognition from customers.

Brands need it because it helps sales: retention is five times less expensive than acquiring new customers.

Moreover, if this isn’t enough, the probability of selling to an already acquired customer is at least 40% more than converting someone who never heard from you before or bought your products. Last but not least, loyalty and retention mean that your customers will probably spend more money on your products – about 31% more than new ones – and will be more interested in new releases.

You see how important it is to avoid pitfalls in your customer retention strategy. It costs in terms of marketing and sales expenses as well as in income opportunities. 

Top 5 customer retention mistakes

Now that you remember why you need to have special care for customer retention, it is time to understand which mistakes to avoid and what to do instead. 

  1. Not knowing your customers
  2. Not collecting data
  3. Not having a fulfilling customer experience
  4. Not creating a relationship with customers
  5. Not making a relationship with customers

Let’s see what they mean and how to fix them.

Not knowing your customers 

It is an unforgivable mistake in every moment of your life as a brand, but it becomes even worse when it comes to retention.

If you don’t know who your customers are, you will not propose a focused and tailored strategy, and you are likely going to look for the wrong people. And there is nothing worse than planning a digital strategy for the wrong target!

How can you fix it? You need to pay attention to the target audience you choose. Relationships with the customers must be nurtured and encouraged thanks to interactions with the brand.

You can avoid this mistake by doing at least three things – study your target audience, develop your buyer personas, and listening to your audience.

All of these are part of a strategy to know your audience so that you can select the best actions to propose. Ask yourself who your audience is and how your relationship is going.

You need to know who buys your products, reads your posts, opens your newsletters. It is the only way for good communication and good retention.

Thanks to buyer personas, you can select the perfect customer model, especially if you pair it with some target market analysis. We can consider buyer personas as ideal and unrealistic customers, in a certain way, while real-time target analysis is about real people.

Moreover, you can work on internal and external research to determine where to focus time and effort. You must understand who your potential customers are, why they like you, their spending habits, job, and even passions and hobbies.

Not collecting data

No data, no business. Nowadays, if you want to run a successful company, you can’t make decisions based on your feelings any longer.

The world is more complicated than only two decades ago, and you need to keep up to have a competitive advantage. Remember that your point of view is narrow and full of biases, and you can’t use it as a parameter to make business decisions if you don’t want a disaster.

How can you fix it? You need to use a data-based approach. You can collect data in different ways, from the forms on your website to the time they spend on your product page to the comments they leave on your Facebook page.

Multisourcing is a dramatic issue because the information is gold, and the customer voice can transfer to your knowledge about how to improve your product or service. However, with so many sources to check, you miss crossing the info that remains inoperative.

Fortunately, you can get out of the trouble using customer analytics tools like Ghostwriter AI CX that analyzes data from many different sources and gives back ready to digest action hints.

Ignore churn rate

Churn rate is the percentage of customers who decided to end their relationship with a company in a certain period.

Churn rate should be one of the primary metrics to check when you want to maintain an excellent relationship with your customers.

A low churn rate is entirely normal, but a high churn rate means that something is getting wrong in how you manage your customers.

How can you fix it? If your customers decided to end your relationship with your brand, it hurts – but you need to be rational and understand why it happened.

Churn rate for customer retention
Churn rate for customer retention

You can do it by studying the data of your most loyal customers. Why are they still with you, or why they left you? For which competitor? What did they find in it that you couldn’t give?

Try to understand if they left in a certain period – maybe when a scandal happened? – or if it is recurring. Maybe, if it happens near Christmas, it means that you don’t have the product or service your clients need?

As always, when there is a problem, the first thing to do is asking yourself a lot of questions. And then, start with some action.

Not having a fulfilling customer experience

The website doesn’t work. Social media customer service is non-existent or, even worse, rude and useless. Social media channels are a desert.

Imagine this dreadful scenario as your brand’s customer experience – can you blame customers for never coming back?

Customer experience is essential for value retention, and it may be one of the causes of your lack of sales.

How can you fix it? Clients like comfortable, familiar environments with no surprises. Make sure your customers can feel the value they have every time they connect with you. People remember how you made them feel, and your customers are people. 

There are several actions you can try to improve CX. First thing first, analyze people’s emotions and comments to know more about your needs – they may surprise you! In this phase, we recommend listening and sentiment analysis.

Thanks to AI and our target analysis tool, you will segment your audience in the most effective way possible.

Then you can start creating a story around your brand to build a devoted fanbase or simplify your buying path to make the customers happier.

Finally, test everything you are going to propose to customers, from a new funnel to the button to subscribe to your newsletter.

And if there is something unclear, ask the only people that will give you the answer – your beloved customers! 

Not creating a relationship with customers

Would you buy something from someone you don’t trust? Probably not, and it happens the same with customers. If you act coldly and only expect them to buy, customer retention will not be so good without building a trusting relationship. People need a reason to come back, and loyalty is the best one.

How can you fix it? Creating a relationship with customers is one of the most challenging yet crucial and satisfactory things a brand can do.

The keyword is engagement. It would help if you made people curious and eager to have news. How?

You can create a fidelity program, launching freebies, scheduling an appointment with your weekly newsletter. Also, remember to provide high-quality content that is both useful and engaging. Be proactive, communicate interestingly and uniquely, give your clients something to come back to that is more than your service. Take care of your content curation strategy.

Don’t forget to track customers’ behavior. It matters to marketing for many reasons, but it is even more when it comes to retention.

Usually, when a client is happy with a product, he will tend to repeat the purchase. In this, marketing and customer service can help him to keep buying.

However, how do you know if your clients are happy about the choice they made? It’s easy – you study their behavior and adapt marketing campaigns by consequence!

Conclusions

We all know that retention is hard to achieve.

It is even more if you indulge in mistakes that may cost you customers’ trust!

To gain customer retention, be proactive, and avoid some simple mistakes like not caring for your clients or ignore analytics.

Good luck!

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