Blog 5 min read

How customer satisfaction affects retention

It might seem like a given – that satisfied customers become repeating customers. And yes, of course, satisfaction affects retention! But there’s more to the story than just sending a happy customer off from your online or brick and mortar store and expect them to come again. Behind high customer satisfaction and retention hides well-planned strategies

What is customer satisfaction?

Customer satisfaction plays a key role in increased revenue in any business. But most retailers and brands focus on enhancing the “smoking gun experience”, meaning when the customer makes a purchase. But what about the experience afterward? You have to work on making the customer wanting to come again!

Because a customer can have a great first experience with you and be satisfied, but still choose another actor for their next purchase. To achieve customer satisfaction you need to work on the touchpoints with your customers when they are not actively shopping.

Read more: 6 secrets to customer retention

Customer satisfaction and retention is all about expectations

What makes a satisfied customer is depending on their expectations. In FMCG, satisfied customers got what they needed at a fair price. In other industries, the customer can have high expectations and if you just meet the basic expectations, that customer will not be satisfied. Make sure you do your research and learn what your customers appreciate and expect from you.

Everything you need to know about customer retention management See page

The effect customer satisfaction has on retention

There is an obvious correlation between customer satisfaction and retention because the dissatisfied customers are not very likely to buy again, right? But remember, a satisfied customer doesn’t automatically mean a loyal customer.

In a competitive field like retail, the correlation really starts to show when you exceed the customer’s expectations. It’s up to you to use your knowledge about your customers – to make sure you give them an experience that makes them want to take action again.

A satisfied customer who you have wowed will become a loyal customer. And what does a loyal customer mean? A returning one, that adds to higher customer retention. There you have it – the effect that satisfied customers have on retention.

Read more: The definition and importance of customer retention

4 ways to increase customer satisfaction and retention

You need to continuously work on and build a relationship with your customers for them to be loyal and increase retention. Here are 4 different examples of what you can do:

Start, or improve your loyalty program

What better way to keep an eye on your customers, get to know them and their interests, and reward them? It’s called a loyalty program for a reason! It’s the perfect way for you to offer your customers the little extra rewards, like:

  • Seeing the latest products before it officially releases
  • Get invitations to inspirational events, online or live
  • Get free shipping
  • Working with gamification campaigns – walk 10.000 steps a day for 10 days and get a free beanie

Fun fact about loyalty programs: 75% of consumers say they favor companies that offer rewards and that loyalty program members spend between 31 % more than other customers per year.


Download the video to learn more about customer retention and get free templates!

Customer service

In retail, customer service is pretty much a deal-breaker. Because 93 % of customers are more likely to make repeat purchases with brands that give them excellent customer service! And this kind of service is not just reactively responding to emails within the hour – it’s about being proactive as well. Be available for the customer at all times. Make it easy for them to find things like your return policies, opening hours, locations, shipping information, and reviews.

Seamless customer experience

Like mentioned earlier, this is about more than just finding a product you like, pay for it, and leave. To get loyal customers who buy again, you need to stand out and show the customer that you appreciate them. For example, if the customer bought a new raincoat, send them a text or email one hour afterward and explain how to best take care of it. And think about surprises! Everyone loves one, right? Add a free small gift to a purchase or send them a happy birthday email, text, or postcard! 

Personalize your communication – for real

If you think personalization means adding a token in an email with the customers’ first name, you’re wrong. We’re talking about looking into each of your customers’ profile, purchase history, and items of interest – then create designed, hyper-personalized communication that applies to that specific customer. Now that is what will impress your customers!

To see if your initiatives have any effect, keep track of metrics like churn score, NPS score, and customer retention rate.

Read more about Voyado that has all these metrics in the same platform 

Start working towards customer satisfaction and retention immediately

The moment a new customer has made a purchase, that’s when the journey to impress them starts for real! The sooner you can get the customer to make a second purchase, the better. Work with true personalization, make the customer feel special, give them one hell of an experience with your brand, and you will increase both satisfaction and retention!

 

 

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