How SMS can help increase profits through customer retention
Businesses often get lost in the race to try and get new customers, spending massive amounts of money and resources on beating their competition into getting as many leads as possible. In fact, 44% of companies have a greater focus on customer acquisition, compared to only 18% that focus on customer retention (Source: SmartInsights).
Which leads to our first however, did you know it costs five times as much to attract a new customer, than to keep and existing one? (Source: Econsultancy)
New customers are great, but businesses can be blinded by them, and start to neglect their existing customers, when actually, customer retention is imperative to any and every business for it to be able to build and grow. Harvard Business School research suggests, that by increasing your retention rates by just 5%, you will increase your profits by 25%.
So by focusing on customer retention you can actually accelerate your business growth with a lower expenditure.
The UKCSI claims that “Consistently outperforming the sector average for customer satisfaction is linked to better financial performance”. Which leads to our second however, customer satisfaction is not just about retention.
By providing an excellent customer experience, not only will your customer satisfaction increase along with your retention rates, but your happy customers will want to do more business with you and provide you with perfect opportunities to up sell.
Not only that, but the best way to market your business is through word of mouth, and by providing your customers with excellent customer service, you will turn your existing customers into your best and most effective sales team as they will become your business advocates selling your business for you.
There are lots of ways SMS is currently helping businesses provide an excellent customer experience:
Giving customers updates and information instantly when they need it through automated SMS. Read more here.
Let your customers text you asking for support or a call, rather than them get frustrated sitting on hold. Read more here.
Information and updates
Give your customers information when they need it, make them feel comfortable knowing that everything is under control.
This leads to our third and final however, to build on and improve your customer experience, your first need to know, what your customers like about your business and what areas they think you could improve on.
“Your most unhappy customers are your greatest source of learning”
Again SMS can help with collecting this information. Grabbing customer feedback has always been a tough task, but SMS has made this process easier for both businesses and customers. IKEA found that by asking customers for their feedback via SMS rather than email, doubled their response rates, this could be down to the 98% open rate that SMS receives compared to the 22% open rate that email receives.
So make sure your business does not forget about customer retention, and looks to provide your customers with excellent customer experiences, as both will enable your business to grow and become more profitable.
If you would like to discuss how business SMS can help your business, please do get in touch or sign up for your free account here