5 Steps You Can Take to Retain Your Existing Customers.
Customer retention is something that clubs across the kids activity industry should be aware of and focussed on improving. Once you have a well-developed product or service to offer to your customers, there is the opportunity for growth through new customers. However, retaining your existing customers will cost your business less in the long-term. To improve your customer retention rate, you'll need to work hard on customer satisfaction by establishing trust with your customers through valuable communication.
What is Customer Retention and Why is it important?
Customer retention is concerned with your club's ability to keep customers interested and engaged with your product/service offerings. It takes into consideration the percentage of customers you retain over a certain period, and is affected by the number of new customers your club attracts and how many customers left.
To work out your customer retention rate, you will need to know the following:
- The number of customers at the end of the period;
- The number of new customers acquired during your specified period;
- The number of customers at the start of the period;
- The period you wish to measure (monthly, quarterly, annually).
Customer Retention Rate (CRR) Formula
Let's put this into a practical example.
Your club wants to measure the number of customers it has managed to retain in the first quarter of the year. At the start of the period, you have 30 children attending your classes. Over the quarter, your marketing efforts attracted 10 new customers, but 3 customers stopped coming.
CRR = ((37-10)/30)x100
Customer retention is something you should have built into your business model and something everyone works on improving, including coaches and staff members. Generally speaking, it's more cost-effective to retain customers as they are already receptive of your product/service offerings when compared with attracting new customers. Existing customers are more receptive of buying more often and referring friends to your club, so having exceptional customer service is a must.
5 Steps to Increase Retention Rate
Promote Your Brand's Initiatives:
Creating a strong brand is crucial as it allows you to tell your story and connect with customers. A well-established brand creates a connection with your customers based on trust as you live out the values your brand is centred around.
Surprise Your Customers:
Remember that retention is all about building a relationship with your customers based on trust. Building strong relationships will create a personal feel to your business and encourages loyal customers to refer your club. When nurturing your customer relationships, you should be thinking about how you can add value for the customer.
Why not try emailing your customers when you have something that will add value to your relationship? Do you have something which will make a real difference to their day? You may offer free branded merchandise or a discount built around them.
Improve Your Customer Service:
Customer support is key. If you notice your existing customer numbers are reducing, you need to look at your customer service. Survey your customer base and ask them about your club and customer experience. You may find customers are finding a lack of communication or staff presence, and these are problems you can improve.
Have a system introduced where you can score points against various measurables such as communication, reliability, friendliness and value. Review customer feedback monthly with your team to keep improving your score. Doing this will lead to happier customers and higher retention rates.
Increase Your Social Media Presence:
Social media plays a crucial role in your communication with customers. With over 75% of parents booking kids activity classes online, your social media channels need to be well-established and maintained.
Make sure that the content you post is engaging and used on correct platforms. Keep in mind that with the content you're posting, you're looking to add value to your customer relationships. You should be posting frequently and responding to your customers to improve your communication.
We've created a social media pack with suggestions on how to improve your social media channels. Download here.
If you can afford to, try incentivising classes. You may want to offer a discount or start a customer loyalty programme. Customer loyalty programmes are a fantastic way of rewarding customers who are committed to your business.
Loyalty programmes keep customers engaged with your club and encourages them to stick around for longer. It also promotes the all-important values we mentioned earlier, creating trust in your brand and adding value for customers. The happier your customers are, the more likely they are to purchase from you again.
By following the customer retention strategies we've discussed in this blog, you can work on improving your customer retention rate. It's important you frequently track your retention rates to monitor where you may need to work to incentivise your customers.
To get your kids activity club ready for business, head to our resources page to access a variety of free resources.