Introduction: Customer Retention in the IT sector
There is an involvement of technology and software in almost everything people use on a daily basis. People have high expectations of the products and services that are offered to them and it has become a compelling task for the IT industry to satisfy the needs of customers and build their company. The IT industry has to be constantly evolving and implementing methods to address the pain points of its customers. Customer retention strategy has proven to be one of the best strategies to improve customer satisfaction and the growth rate of your concern. Learn more about how to improve customer retention and to develop your business in the IT industry.
What does Customer Retention mean?
Customer retention is a term used in marketing. It is defined as activities and programs companies use to reduce the number of customer defections. In order for a company to succeed it must not only acquire new customers, but also keep the ones it has. High customer retention rates are usually indicative of a strong and healthy business. There are various ways to measure customer retention, but one of the most common is the “churn rate”.
The churn rate is the percentage of customers who leave a company during a given period of time. A high churn rate is often a sign that something is wrong with a company’s products or services. Conversely, a low churn rate indicates that customers are happy with what they are getting and are unlikely to look elsewhere for their needs.
Customer retention in turn boosts loyalty, which would motivate them to repeat their purchase from you. It helps IT and SaaS companies to generate more revenue from their current customers instead of acquiring new ones.
Significance of customer retention
Customer retention strategy is a significant factor that a business can focus on to scale up sales of their products and services. It increases brand advocacy and loyalty. It improves the Customer Lifetime Value of all the existing customers.
A company has to spend more on acquiring new customers than to retain their current customers. In such cases, customer retention helps them to lower their expenses without affecting their ROI.
A huge percentage of a company’s revenue comes from returning customers. Research states that up to 77% of customers are more likely to suggest your products and services to others if they have a good experience and find the service satisfactory. In today’s competitive marketplace, customer retention strategy is essential for any business that wants to succeed.
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Strategies to retain customers
Implementing strategies to improve the customer retention rate of a business is a smart move to make. Not concentrating on customer retention might have a negative impact on the growth of a company. It may increase the customer churn rate, decrease the company’s ROI, affect the customer relationship, and might cause bad customer experience. You can adopt various strategies which cater to the particular needs of your business to improve customer retention. Here are some strategies which help in increasing customer retention.
Create a user-friendly UI design:
People expect everything to happen swiftly, as they don’t have time to sit back and wait patiently. You need to pick up their pace to cater to the needs of customers to ensure good user experiences.
A website or an application that takes too long to load or is complex to work on creates a bad impression about the brand. The customer login portal is an interface that helps existing customers to use your services. Creating an innovative and user-friendly design ensures an excellent experience. If a customer logs in to use your software services, you can create an interface that includes a space for information about upcoming events, product details and new services. This will attract customers and promote their engagement with the content for a long time.
Creating a user-friendly interface design can make a huge difference in the customer retention rate. Build an interface that paves the way for easy navigation, swift, simple and efficient to use. Know what your target audience expects and create a user-friendly interface according to their needs.
Keep your customers informed about your latest products and services through newsletters
Using newsletters is one of the significant methods to build a long-term relationship with customers and to not lose them to your competitors. It is a great way to keep them informed about the new products and services, offers, deals, etc. with not just the sole goal to boost sales but to ensure personalized customer service.
Newsletters should not just promote your products and services to the customers as it would make them lose interest and there is a high chance that they will never open them. Make your newsletters as compelling as possible with specific content, and short but witty headlines that will kindle their desire to open and engage with your newsletter. In subscription-based offerings, where customers subscribe to your services on a monthly or yearly basis, it helps to stay connected with the customers. This ensures that their needs are met and that they continue their subscription.
Establish brand credibility
Brand credibility is nothing but acquiring the trust of the customers. Your company should be recognized among the target audience as a trustworthy company. Only then can it lead to customer retention. If a customer is not satisfied with their purchase of your product, they will not return to you. Additionally, they will publish bad reviews about your product, which will lower customer retention of your business. Peer review is indeed powerful.
To improve brand credibility, offer quality services, maintain a good relationship with customers, use past customer testimonials, and give a hassle-free customer experience. Software companies often risk being accused of bugs and malware as they can be a privacy concern for the customers. Customer testimonials can be of help in gaining the trust of customers in such instances, and it will surely improve customer retention.
Use Customer Relationship Management tools
Customer relationship management is essential to helping any business grow. Poor customer service may lead to low lead generation, decrease in sales and it is bad for your brand credibility. Using a CRM tool can benefit you in various ways to retain customers. It helps in enhancing data management so that you know what exactly your customer expects from you. It records customer’s past activity to provide personalized content. CRM also helps in discovering the platforms that are preferred by the customers so that you can reach out to them on specific platforms.
It helps in maintaining a good customer relationship. You can address swiftly and save up automatic replies for frequently asked questions. In SaaS companies, CRM tools track the churn rate, that is, the rate of unsubscribes and help in reducing churn.
Vajra uses Freshworks CRM tool to help your business retain customers by taking care of various other aspects which lead to customer retention.
Improve brand positioning
Brand positioning is making your brand stand the test of time and retaining its position in the minds of your customers. It is making the customers recognize the uniqueness of your brand and how it stands out from the crowd. To improve brand positioning, be honest about what values you offer your customers. Publish creative and unique content that impresses customers. Ensure that you always deliver what you promise them, and enhance their experiences with seamless customer care. Software is a highly evolving platform and you need to come up with new technologies and services to retain your brand position in the market.
How can Vajra help you with customer retention?
Customer retention is a very important part of the IT industry. Especially in SaaS companies, customer retention proves to be an effective strategy to increase revenue. Even a small percentage increase in the customer retention rate increases the company’s revenue by up to 95%. Also, customer retention is a cost-effective way to improve your company’s revenue rather than customer acquisition.
As India’s leading marketing agency, Vajra offers effective and personalized services like UX design, brand positioning, brand credibility, CRM, content marketing, etc. to help your business improve its customer retention. Reach out to us, to get a personalized customer retention strategy for your business.