Customer Retention In Financial Services
One mistake that a lot of businesses make in the financial services sector today is focusing on acquiring new clients and giving little thought to retention. In fact, retaining customers can be your biggest and most significant weapon as a business. With that being said, in this blog post, we are going to take a look at customer retention in the financial services sector in further detail to help you get a better understanding.
What is retention?
Customer retention is a term that is used to describe the actions and activities that organizations and businesses take in order to lower the number of customer defections. The goal of implementing a customer retention program is to enable businesses to keep a hold of as many of their customers as possible. This typically involves using brand loyalty and customer loyalty initiatives, however, there are many different strategies to choose from depending on the nature of your company and your target consumer base.
Do you know how many customers are leaving you or are just dormant?
When focusing on customer retention strategies, one of the most difficult elements is determining whether or not a customer is going to leave your business or whether they are simply dormant. This is something you will need to figure out using data so you can make sure that you target your efforts effectively.
What are the benefits of retention?
There are a number of different benefits that are associated with focusing on customer retention. This includes the following…
- Increase in customer lifetime value
- Your brand will stand out from the crowd
- You are going to earn more word of mouth referrals
- It is cheaper than acquisition
- Loyal customers are more profitable
- Enables new product sales
- Customers will explore your brand
- You will get more feedback from engaged customers
- Loyal customers are more forgiving
- You will have more room to try out new things
When you consider all of the advantages that have been discussed, you can see how focusing on customer retention is the only way to drive true value to your business. Getting a new customer can feel exciting and like an achievement. However, it’s not until you have converted that client into a loyal customer that you will really begin to feel the fruits of your labour.
Importance of retention some food for thought.
i) Business don’t make money in year 1
ii) Profit from customers start in year 2 onwards
Therefore, you need to focus on retaining customers to truly drive profit. If you have a high turnover of clients, you’re not going to make much money.
So there you have it; the importance of customer retention in the financial services sector. As you can see, holding onto customers is arguably even more important than finding new customers in the financial services sector. This is something you need to give a lot of consideration to when it comes to your marketing efforts today.