These days, starting a business seems to be easier than ever. You come up with an idea for a product or service, create a website to promote and sell it, and you are good to go. With the help of various technologies and the Internet, even a student can handle this task, which is why there are plenty of aspiring entrepreneurs in colleges today.
Nevertheless, of course, having just a product/service and a website is not enough. There are many other things that aspiring entrepreneurs have to take care of. Sometimes, dealing with different issues turns out to be rather hard, especially for student entrepreneurs. And one of such issues is customer retention.
If you are a student entrepreneur yourself, improving the customer retention rate on your site can be incredibly challenging. It takes lots of time and skills to succeed. But it’s not impossible. You can get homework help by WritePaper to carve out more time for this task without harming your academic performance. And, after you do this, you can use this article as a guide to success!
What Is Customer Retention Rate and Why Should You Care?
The term “customer retention” is used to describe a brand’s ability to keep its clients coming back to it after some time. Simply put, if your customer retention is good, it means that clients like your product, service, or brand enough to stay with it rather than leaving you for a competitor.
Calculating the customer retention rate is crucial for your overall business and marketing strategy. Basically, this rate is used to measure the effectiveness of a brand’s relationships with clients and find areas for further improvement.
Here is a formula that you can use to calculate it:
Retention Rate = ((CE-CN)/CS)) X 100
And here is a translation of the variables from this formula:
- CE = The overall number of clients you had over a specific period;
- CN = The overall number of new clients that you acquired over the same period;
- CS = The overall number of clients you had at the beginning of that period.
There are many reasons why student entrepreneurs should calculate their customer retention rates. Most importantly, keeping an eye on this metric can help you cut down the costs of sales, marketing, and other onboarding tasks because onboarding a new client is about 5x to 25x more costly than retaining an existing one. At the same time, it will help you keep your clients happy and, thus, boost brand loyalty and earn referrals.
Lastly, according to the Harvard Business review, increasing this rate by even 5% can grow your profits by 25% to 95%.
As you can see, the right customer retention strategy can be a real game-changer. It can make your business more cost-efficient and profitable. Now, let’s look at a few simple tricks that will help you boost the customer retention rate on your site.
Tweak the Pricing
Adjusting the pricing for returning customers is probably the easiest and the most popular tactic for keeping them coming back to you. All you need to do is to offer discounts to existing clients. You can notify them about discounts via email or right in their receipts. And, additionally, you can provide them with other price-related perks, such as free shipping.
Such pricing adjustments can be a great motivation for existing clients to come back to you and buy more. Besides, it is a good way to keep them happy and loyal.
Hone Your Cross-Selling and Upselling Strategies
When starting an online store, many student entrepreneurs overlook two vital sales tricks that could get their brands up and running. We are talking about cross-selling and upselling. And these tricks can improve your retention rate too.
The idea is very simple. Whenever a client shops on your site, visits certain pages and adds specific products to a cart – your task is to track all these behaviors and seek patterns. This data will let you define other related products that a particular customer might also like. And then you can use your website and other communication tools to cross-sell and upsell additional products or services.
If you do this effectively, clients will feel like you take good care of them and will stay with you.
Create a Loyalty Program
Customer retention and loyalty are tightly interlinked. When you nourish one of these indicators, another one will likely improve too. So, by focusing on building up loyalty, you can also keep buyers coming back to you.
To do this, you need to create a loyalty program. There are plenty of program formats that you can use. For example, you can pick the top 10% of buyers and give them unique offers every month. Also, you can offer loyal clients a progressing reward. Let’s say the more they spend on your site, the higher discount they will get.
Such programs work great for retaining existing buyers.
Focus on Personalization
This is the last trick we’d like to share with you. But, it is definitely no less effective. It has been proven that modern consumers love to have their experiences personalized. Personalization increases their trust and satisfaction. And it also boosts their retention.
To use this trick for success, you must learn how to collect and analyze buyers’ data. You want to learn more about your clients and then use this knowledge to personalize their experiences. For example, you could display a welcome message with a buyer’s name when they return to your site. Also, you can offer special birthday gifts and discounts.
Such small details matter a lot for loyalty and retention. So, don’t neglect this tip.
The Bottom Line
Running an online business as a student is never a piece of cake. As a young and inexperienced entrepreneur, you will likely face lots of unknown issues, one of which is customer retention.
Hopefully, this guide will help you understand what it is and the role it plays in your business. Use the tips from this article to get your brand on the right track and boost profit!
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