Businesses today work extremely hard to acquire customers and even harder to retain them. They employ various marketing tactics, social media strategies, advertisements, and much more to gain their customers’ trust and build lasting relationships. As per one of the studies conducted by Bain & Company, increasing customer retention rates by 5% increases profits by 25% to 95%.
This is where customer retention comes into play, helping businesses capitalise on existing customers without having to spend another penny on acquiring new customers.
In this blog, we will discover how customer retention software helps brands build stronger and lasting relationships with their customers. But first, let’s get to know more about customer retention.
What is Customer Retention?
Customer retention is the capability of a brand to turn its new customers into repeat buyers and prevent them from going to their competitors. A higher customer retention rate shows that the brand is delivering what it promises, building trust and fostering long-term loyalty among its customers. A brand may have an exceptional customer acquisition model, but without a powerful retention strategy to keep its customers with it, it is all worthless.
Why is Customer Retention Better Than Customer Acquisition?
When it comes to growing a business, customer acquisition gets all the love, whereas the real value-add comes from the fundamental work of retention, which is both cost-effective and generates more revenue.
As per one of the studies published in the Harvard Business Review, “customer retention costs about 5 to 25 times less than acquiring new ones”. Plus, a slight increase in the retention rates could boost the profit margins exceptionally.
Well, think of a utility bill payment company; For every credit card bill, electricity bill, or rental payment that you make, they offer certain reward points. You can redeem those points to either pay further bills or to make purchases. Thispoints-based loyalty program has seen customers spending up to three times as much as regular customers, helping brands generate revenue without having to run after new customers.
But what makes it possible? How do brands know which customer loyalty program to offer their customers? This is made possible by customer retention software, which collects and analyses customer data to understand their preferences, improve their experience, and lower churn rates.
(Read along: Reward Points Programs: How They Work and Why They Matter)
What is Customer Retention Software?
Customer retention and loyalty software is a range of tools that helps brands keep their customers satisfied through various rewards and loyalty programs, keep them engaged, and reduce the churn rate. Often used by the sales, marketing, and customer service teams, the main goal of using a customer retention management tool is to increase the lifetime value of customers by providing them with tailored customer loyalty programs and ongoing communication.
By using customer loyalty & retention software, businesses get to deliver personalised experiences to customers, which is a key factor in preventing loyal customers from turning away from the brand. Let us take a look at some of the benefits of using customer retention software.
The Benefits of Customer Retention Software
At its core, customer retention management software tracks, collects, and analyses customer data to help businesses understand what their customers want and how they can keep their customers happy and engaged. It uses customer journey analytics and customer engagement and experience platforms to come up with the best customer retention solutions that lower attrition and increase customer lifetime value. Implementing customer loyalty and retention software comes with a lot more benefits, like –
1. Relevant, Timely, & Personalized Interactions
Customer retention software can easily integrate with CRM systems, ensuring all customer interactions are managed in one place. This gives businesses a 360-degree view of the customer journeys, enabling them to deliver timely, relevant and highly personalised interactions based on the customers’ preferences.
A classic example of this is Custify, which offers a comprehensive view of each customer’s health and engagement.
2. Creation and Management of Loyalty Programs
Another powerful feature of customer retention software is its ability to create and manage loyalty programs. Brands utilise these programs to incentivise their customers to come back and make repeat purchases, making it an essential tool for sustained growth.
3. Automation of Tasks
Customer loyalty and retention software empowers businesses to automate tasks such as email campaigns, and engaging customers at different stages of the lifecycle. These tools make it easy for brands to send personalised communications to their customers consistently in a timely fashion.
4. Higher ROI
Loyal customers are more likely to spend more and explore more services offered by the business. This is why it is widely accepted that retaining customers is far more cost-effective than acquiring new ones. Customer retention software empowers brands to gain deeper insights into customer behaviour, using which they can tailor their reward programs to best fit the needs of their customers.
5. Enhanced Customer Experience
According to PwC, 1 in 3 customers tend to leave the brand just after the first poor experience, while 92% of those would leave after 2 or 3 consistently bad experiences.
These stats highlight the importance of customer experience in customer retention. Software customer retention relies heavily on understanding consumer patterns to improve their overall experience, thereby increasing the retention rate and reducing churn.
How to Choose the Right Customer Loyalty & Retention Software
Customer retention software is like coffee. From afar, all may appear to do the same thing, but each has its own features, functions, and benefits. Based on your requirements, you can choose the right customer retention software. Therefore, it’s important that you know what your requirements are. Here are some things to consider while choosing the right customer retention software for your business –
- Define Your Brand Goals – You need to be clear about what you wish to achieve from the customer retention tool. You need to clearly outline your objectives and goals, to select the right features that would suit your needs.
- Consider Scalability: With growing business, the need for retaining more and more customers would evolve. This would require software that can scale up with your business. Look for software with flexible pricing and easy scalability.
- Easy Integration: Most customer retention software offers easy integration with existing systems like CRM, e-commerce stores, etc. When selecting the right customer retention platform, look for the one that can be seamlessly integrated with your existing systems.
- Options for Personalisation: Customisations play a key role in enhancing customer experience. Therefore, while choosing the best customer retention software for your brand, select the one that offers customization options for your loyalty programs.
Yegertek – Enabling Brands to Reward and Retain Their Customers
We at Yegertek understand the loyalty reward programs and customer retention management, which is why we enable brands to engage, reward, and retain their customers through our transformative loyalty solutions. We leverage the exceptional features of the ENGAGE-365 solutions, powered by Microsoft to provide flexible loyalty software solutions.
With the ENAGAGE-365 solution, you get to build attractive reward programs for your customers, personalised to resonate with their preferences, fostering lasting relationships and sustained growth. ENGAGE-365 allows you to get a comprehensive view of your customer data and turn insights into action to offer exceptional customer experiences.
It also allows you to improve customer engagement and build a brand community, using referral offers as part of your loyalty programs.
Final Thoughts
As seen above, the benefits of customer loyalty and retention software go way beyond just reducing churn. They not only help in retaining a customer centric approach but also help your business stay ahead of the curve. Customer retention software empowers brands to build stronger connections and long-lasting relationships, and drive profitability that leads to sustainable growth.
By choosing the right customer retention software businesses not only gain deeper insights into customer behaviour and patterns but also design bespoke rewards that foster loyalty among customers and turn them into brand advocates.
Looking for the best customer retention software for your business? Get in touch to discuss your requirements in detail.
