Nurturing your relationships with customers is a crucial part of the B2C business model. Your goal isn’t just to make a one-time sales deal, but to delight your customers with such a positive experience that it generates repeat business.
On this page, we’ll explain where brand tracking comes into the picture, and how you can leverage its insights to maximize customer loyalty and retention rates.
Understanding brand tracking
Brand tracking is the process of monitoring and evaluating how customers perceive your business over time. It’s essentially about looking at your brand from the eyes of consumers and thinking—“Am I resonating with my target audience?”
By implementing brand tracking techniques, you can pinpoint exactly where you’re delivering a good service and where you’re possibly falling short of expectations. It allows you to identify pain points and direct customer focus toward positive experiences with your business.
The importance of customer retention
Customer retention refers to the ability of a business to develop long-term relationships with clients, and it’s a highly-coveted goal for several reasons:
- Cost efficiency: It’s often cheaper to hold onto customers than it is to acquire new ones, which saves you money and ensures revenue stability.
- Word-of-mouth advertising: Loyal customers will sing your praises to other potential customers. This results in a cycle of lower customer acquisition costs and an increase in revenue.
- Better feedback: Your cloud contact center platform is more likely to receive useful feedback from a satisfied customer who genuinely cares about your products and service quality.
How to calculate customer retention rate
Customer retention rate is one of the best ways of measuring brand performance and customer loyalty. It’s really easy to calculate—you just need to measure 3 figures over a period of time:
- Note the total number of customers that you had at the beginning of a test period (for example, the first day of the month). This figure is called Customer Start, or CS.
- Work out how many new customers you acquired during that time period (such as from the start until the end of the month). This figure is called New Customers, or CN.
- Determine the current customers you have right now (i.e. the last day of the month). This figure is called Customer End, or CE.
Now, you can calculate the retention rate in your customer base:
Simply subtract the number of new customers you gained (CN) from the total number of customers you have at the end of a period (CE). Then, divide that result by the initial number of customers (CS) and multiply by 100 to get a percentage.
Image sourced from Customer Thermometer
5 metrics for measuring customer loyalty
Here are some other methods for working out the loyalty of your customers as part of a brand tracking strategy:
Customer satisfaction score (CSAT)
CSAT is a representation of how happy your customers were with a product, service, or overall experience with your business. It’s not a tangible number—rather, it’s a concept that’s measured through customer surveys. For instance, you could ask your customers to rank their satisfaction on a scale of 1 to 5 via a follow-up email or text.
So, what’s the best way to boost your CSAT score?
In short, you just need to take a truly customer-centric approach. A great place to start is by improving your customer service. Make sure it’s accessible, with a direct channel to SMS, voice, or email support. Having instant access to a wide range of communications is one of the benefits of CPaaS, and it’s a common theme amongst successful companies.
Net promoter score (NPS)
NPS represents how likely a customer is to recommend your business to other people. Like CSAT, it’s measured through customer forms and surveys such as the following example:
“On a scale of 0 to 10, how likely are you to recommend our [product/service/company] to a friend or colleague?”
Gathering this type of customer input is another great way of measuring customer satisfaction, but it also opens the door for you to ask more questions. Try following it up with a text box for elaborating on why they gave a high or low score—this will provide you with more bespoke feedback and direction on how to improve your service offering.
Referral rate
For a more concrete approach to NPS, you can also measure the conversion rates of relevant data sources, such as referral programs or affiliate sign-up links. This is an effective method for identifying your most loyal customers and elevating them to the role of ‘brand ambassador’—which can help you attract influencers in the realm of social media marketing.
Product return rate (PRR)
When orders are being returned at an unusual rate, it’s a red flag that something is seriously wrong. Whether it’s due to ineffective communication or poor product quality, you need to identify the reason why.
On average, the product return rate for ecommerce businesses hovers around 20 to 30 percent, and around 10 percent for brick-and-mortar stores. So, make sure to set up automated alerts if any of your product offerings stray out of these boundaries.
Customer effort score (CES)
CES represents how ‘difficult’ it was for a customer to achieve a goal or resolve an issue with your company. The best ways to measure it are as a feedback metric—such as how easy your product was to set up, or how intuitive your customer service was to navigate.
You should also examine contextual information to find the root cause of customer issues. For example, if your customers are struggling to download remote desktop for Mac, but the problem isn’t being reported among Windows users, then it’s obvious where the problem lies. Your task is to spot these trends and squash bugs before they become a serious nuisance.
Conclusion
To wrap up, customer loyalty and retention is everything you should strive for as a business owner. It’s an integral aspect of brand building and, without it, you’ll bleed losses as your current pool of customers dries up.
By implementing these brand tracking metrics in your customer service operation, you’ll be able to create a targeted retention strategy for long-term success. You’ll turn happy customers into loyal brand advocates, and enjoy the profits this generates as they make product recommendations to their families and friends.
Remember, this type of brand visibility is like gold dust. It’s more effective than any other marketing technique—get it right, and you’ll create a trustworthy brand image that drives sustained business growth. There are no shortcuts to getting here: you simply have to put your customers first.
