What To Look for in a Customer Retention Software

Every time a customer returns to your services, your business grows stronger.

Repeat customers are your lifeline. They are key to securing sustainable success. That’s why investing in customer retention software is a smart move for your future.

Let’s break down the value of customer retention versus acquisition.

Then, you need to know how to set retention goals for your industry. Software can be an incredible help with that. So, what are some of the key features to look for so that you get the most benefit from it? We’ll share some top considerations to get you started.

We’ll finish with a few quick tips to help you find the best software for your needs.

Let’s get started.

The Value of Customer Retention

Customer retention means keeping your customers returning to your business. In contrast, customer acquisition means converting new customers.

Retention should be your primary focus in service industries like HVAC, plumbing, electrical, or carpet cleaning. Why? Because acquiring a new customer can cost five to seven times more than retaining an existing one.

Think about it like this: You spend $100 to attract a new customer. Instead, you could spend $14 to $20 keeping an existing one.

Poor service costs US businesses about $83 billion annually. Lost customers are one major reason.

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Of course, you need to attract new customers to safeguard your long-term success. That’s important, too.

But loyal customers are your bread and butter. They tend to spend more than one-time buyers. Consider how much maintenance services contribute to your revenue.

What’s more, repeat customers become enthusiastic brand advocates. They recommend your services to anyone who will listen. Personal recommendations amplify growth potential without increasing marketing expenses.

Identifying Your Customer Retention Goals

How high should your retention rate be?

The average across all industries is about 75%. In other words, for every 100 customers you serve, 75 will choose you again if they need your services.

For services businesses, the average retention rate may be a little higher. It’s between 67 and 84%.

These benchmarks are helpful. However, your goals will depend on your industry’s dynamics.

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Customer Retention for HVAC Contractors

Industry insights:

Acquiring one new HVAC customer can cost between $200 and $300.
HVAC maintenance is a consistent need. It provides a reliable revenue stream.
The HVAC market has many small competitors due to low start-up costs. Saturation leads to fierce local competition.

What this means for your retention goals:

Aim for a high retention rate. Much of your revenue comes from maintenance. So, aim for a retention rate of over 75%.
Maximize maintenance contracts. Focus on securing long-term maintenance agreements from new installations. You’ll increase repeat business.
Improve customer service. Stand out in a crowded market. Offer exceptional service that turns first-timers into repeat customers.

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Customer Retention for Plumbing Services

Industry insights:

Plumbing is an essential service. Plumbing systems always need repair and maintenance, especially as properties age.
Most plumbing businesses are regional. They face only moderate competition thanks to high demand.
Many plumbers are independent, serving local community needs.

What this means for your retention goals:

Aim for an average retention rate. The demand for plumbing services never stops. You have a bit of breathing room. Try to keep your retention rate around 75%.
Build local loyalty. Develop strong community ties and a reputation for reliability.
Offer flexible solutions. Adapt services to the needs of your area. Consider offering specialized maintenance packages.

Customer Retention for Electrical Services

Industry insights:

A large part of electrical work is tied to new construction. Updates and maintenance are also important.
Electrical tasks often involve essential services. This includes wiring for various systems, including fire suppression and HVAC.
Electricians typically serve a small geographic area unless they’re involved in large utility-based projects.

What this means for your retention goals:

Tailor your retention rate goals. If a lot of your revenue comes from new builds, a lower retention rate will be fine. Figure out whether more maintenance work could better support your business goals.
Keep up with technological advances. Stay ahead of green energy trends to attract and retain customers looking for energy savings.
Prioritize safety. Ensure your services meet the highest safety and efficiency standards. Trust will encourage repeat business and referrals.

Key Features of Customer Retention Software

You can see how customer retention benefits your business, regardless of sector. But how do you do it? There are a lot of ins and outs, but customer retention software can be like having a dedicated retention manager. It helps take the mental energy and physical management tasks off your shoulders.

Here are some key features to look for in customer retention software:

Lead Tracking and Management

Lead tracking features record all customer interactions from the moment they show interest in your service. It stores information like:

Contact details
Status of inquires
Services they are interested in

With this data at your fingertips, you can ensure every customer gets the attention they deserve. You can follow up fast and provide personalized service.

Customer Service and Support Tools

Customer retention software acts as a centralized service platform. You can see requests, response times, and resolutions in one place. This helps you manage customer queries and issues to provide the best service possible.

Quick, thorough, and thoughtful handling of customer issues leads to higher satisfaction rates. Customers who experience great service are more likely to choose you again.

Feedback and Surveys

Some software solutions allow you to collect and analyze customer feedback. They automatically send surveys and collect responses.

You can use this data to better understand your customers’ perspectives. You can make data-backed decisions that solve common concerns or address service gaps.

Email Marketing Tools

Email marketing is an extremely effective tool for customer retention. The right software lets you create, send, and monitor email campaigns.

These keep your customers informed and engaged. You stay top-of-mind. So, the next time they need service, they call your business.

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Segmentation Features

With this functionality, you can categorize customers based on criteria. This might be their service usage patterns, preferences, or demographics.

You can then target these segments with personalized marketing strategies. Personalizing your marketing can drive incredible results. It can:

Reduce customer acquisition costs by 50%
Lift revenue by 5 to 15%
Boost marketing return on investment (ROI) by 10 to 30%

Customer Loyalty Programs and Referrals

Some customer retention software helps you design and manage loyalty and referral programs.

It records customer purchases and interactions. Then, it allocates rewards and tracks referrals from loyal customers. You enjoy more business, and your customers feel valued.

The best loyalty programs can increase revenue from participating customers by 15 to 25% annually.

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How You Can Start Choosing a Customer Retention Software Right Now

Here are some steps you can use right now to start selecting the best software for your needs:

Identify the main problems you want to solve with the software.
Define clear objectives, like increasing repeat customer rates by a specific percentage.
Schedule software demos. Prepare questions to assess how well the software meets your needs.
Check if the software includes essential features. Look for customer segmentation, analytics, and automated marketing.
Make sure the software integrates with your existing tools and systems.