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The 5 Most Common Retention Mistakes And How to Avoid

 For many business owners and leaders, the fact that they have a great service or product offering, inbound marketing and that their customer service is good, translates to high customer retention levels for them.

However, the reality is the complete opposite.

Customer Monitor says, a mere 5% additional retention of customers can lead to a boost in your profits by a full quarter.

This simply means that you need to earn your customers’ loyalty, which will take more than just a pleasant smile from your front office person, or a proper and working product or service.

Without a strategy in place that is designed specifically to retain customers, you are sure to get reductions in revenues, and halt the growth of your business.

Some of the reasons why you need a customer retention strategy are because replacing customers, whether one or many, is costlier than retaining them.

In fact, depending on your industry and the research involved, customer acquisition can set you back between five and 25 times over compared to retaining customers.

You can also lose out on profit increases of up to 95 percent because of poor customer retention strategies.

Customer retention also boosts the value of your company, so it is worth implementing a customer retention strategy in your company.

But even with the strategy in place, there still are some mistakes made that affect customer retention, thereby impacting on your bottom line.

What follows are five of the most common customer retention mistakes most businesses make.

  1.   Focusing more on customer acquisition than retention

Growing your customer base is a priority, but it shouldn’t make you neglect the customers you have already acquired.

Courting a new client can be costly, as Harvard Business Review notes, it can be up to 25 times costlier than retaining your current clients. That’s quite a lot of effort in terms of time and money on something that you’re not sure of getting.

A simple Thank You message like what Zappos does for its customers is enough to cement the loyalty and retain your current customers. It also distinguishes a mere website with no human face, from brands customers love.

Zappos thank you note handwritten


Image source: Forbes

Ultimately, customer loyalty and retention is much more profitable compared to customer acquisition.

Current customers are also more likely to increase the amount they spend with your business over time, while the cost of servicing such customers also declines.

Additionally, there’s a higher likelihood of your loyal customers promoting your business and staying with you, compared to going to your competitors whom they’re less familiar with.

  1.   Ignoring customer feedback data and analytics

When you have access to feedback data or analytics from your customers and you don’t use the information, this is a huge mistake in customer retention.

The worst thing is when you don’t have any such feedback data or analytics at all.

When you collect, collate, and update your customers’ feedback, and analyze the same for decision making, you’re best placed to understand what they want and need from your business.

There’s always some data generated by your business, including data from customer transactions.

To delve deeper into the insights your business needs for success, you need a more advanced way of getting and understanding the overall customer feedback levels.

Feedback could uncover insights that will be revolutionary to the direction of your business strategy.

You can follow it up with an action strategy to streamline discouraging factors. Tools like Google analytics and web analyser would let you see if and how customer trends have changed. In a way, it’s a measure for your inputs.

  1.   Poor interpretation of what customers are thinking

How well do you interpret your customer data?

Data by Bain and Co. revealed that 80 percent of companies from their survey claimed to offer the best in customer service, but only a mere 8 percent of these companies’ customers agreed with their claims.

This goes to show that reality and strategy are not merging in the middle.

A study by IBM also demonstrated how wrong businesses get over what their customers think.

The survey sought to find out from the businesses why they thought their clients follow them on social media.

A majority of the companies surveyed ranked purchases and discounts as the least important reasons. However, when IBM surveyed their customers, they listed purchases and discounts as the main reasons they follow these companies on social media.

Amazon followed the lead of their customers by implementing a subscription service in the form of Prime. Initially, it was meant to do deliveries faster, but soon became popular among its regular shoppers.

Businesses need to focus more on the actual behavior of their customers and less on their own predictions about the same behavior.

  1.   Not being proactive enough to engage and understand customers

This happens when businesses are only reactive, and not proactive to their customers’ needs and wants.

They don’t engage with clients to understand their issues and do their best to help them.

Not listening or engaging with customers, or if you’re too afraid to ask what could be wrong and act on it, or just not having continuous relationships with customers leads to lower retention levels.

A good example of this is how Australian IT support firm, R&G Technologies uses their customer satisfaction surveys to develop long-term, strong relationships with customers.

Not only do these give customers the chance to express what the company gets wrong or right, it also helps them pick out distraught customers well in advance.

Having customers, especially those that are loyal, isn’t a given, especially in the digital age.

The competition is fierce so businesses need to work even harder to maintain customer retention, which is the best strategy going forward.

E-commerce businesses do it all the time. They understand why it matters to invest in customer experience tools. It won’t come down to customers leaving in the first place, if they deliver the kind of experience customers are looking for.

  1.   Poor onboarding of customers

When businesses underestimate the importance of customer onboarding, it undermines their investment in their software, while threatening the customers’ loyalty and retention.

Poor onboarding also means that the many new updates, features, add-ons or new things your company comes up with that differentiate you from competitors, remain unused and a mystery.

Customers also don’t get to reap the value of their investment in your business, thus they lack compelling reasons to stay or to keep paying for your products or services.

It also means they’ll jump at the next available chance to adopt product offerings or services that promise fulfillment of their needs, easily and faster.

WhatsApp Inc., now a part of Facebook, always keeps customers updated on new features, and fix-it solutions so they don’t get frustrated when using the app.

Upshot –

Customer loyalty and retention is one of the most important things for any business to maintain.

Brands have to work harder to keep their customers coming back, and build transparency and trust in their customers.

While new business is a growing company’s food, customer retention is its oxygen, because as much as you can survive without new business for a little while, it’ll suffocate quickly without customer retention.

For your business to experience more growth, improve and retain your current relationships with your customers.


Tulip Turner –

Tulip Turner Alvomedia

Tulip is a Content and Inbound Marketing expert at Snewscms. Over the years, she has helped dozens of businesses in defining their content strategy. She believes that creativity doesn’t inspire customers anymore. A true story when recited well, is enough to build a connect.

Twitter – @snewscmss

Facebook – @snewscms


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