There are numerous ways to improve customer engagement and retention rates. You can employ more emotionally intelligent marketing, knowledge management, customer feedback, automated processes, and responsive customer service. That’s only the tip of the iceberg.
Beyond those considerations, a company’s values, behaviors, philosophies, and beliefs can also play a significant role in the customer experience. If the customer does not see their values reflected in your brand’s values, for instance, they are more likely to pass you over for another brand that does resonate more with their beliefs.
Now more than ever, social values are heavily influencing customer decisions. Today’s generation of consumers is much more mindful, ethical, and conscious of how their behaviors affect others. As such, they are also more discerning of the brands they choose to engage with.
As a result, the market has been revolutionized by social change and inclusive thinking. In fact, 61% of American consumers believe diversity in advertising is important, and 38% say they are more likely to trust a brand that is more diverse and inclusive.
This makes it crucial for brands to adopt more diverse and inclusive values and practices. If you want to retain customers, you must show them that their values are your values. And you must do so genuinely and ethically.
In other words, you cannot simply create diverse marketing campaigns if your internal company values and behaviors do not reflect diversity and inclusivity as well. You must work on creating a brand that is diverse and inclusive from the inside out.
This article will take a closer look at how customer retention works, explore the connection between diversity and customer retention, and offer insights on how to create a more diverse and inclusive brand that improves customer engagement and retention rates.
Understanding Customer Retention
Customer retention rates are the measure of the rate at which customers stay with a company in a given time period. You get this number by dividing the total customers gained for a specific period by the number of customers at the start of that same period.
The average customer retention rate can vary depending on the industry. For example, for e-commerce, it’s 38%. For SaaS businesses, it’s 35%. And for news and media publishers, it’s 25%.
But why does this matter?
Calculating customer retention rates is a way of measuring the success of a business. Essentially, the more loyal customers you have, the more money you make. And the more money you make, the more you can grow your business and achieve success.
How good customer retention rates are achieved, however, is somewhat more complicated. Customer retention happens with the combined effort of many moving parts. While some companies think they will simply retain customers by designing a good product, this is not the case.
How you make the product, how you market that product, how you deliver that product, why you are making that product, and how your company handles customer service in relation to that product all play a part in customer retention. It is essentially the entire customer experience surrounding the product and your brand that will determine your retention rates.
Everything you do as a company technically plays a part in the customer experience. It is not just the act of putting a good product in the hands of your customer. If your customer retention rates go down, it is likely because you aren’t providing a good customer experience and are neglecting customer relationships.
To create better customer experiences and maximize customer retention, you can:
• Provide more personalized experiences;
• Provide superior and unbeatable customer support;
• Use emotionally intelligent marketing;
• Provide customers with a unique value proposition;
• Automate customer processes, such as onboarding and e-commerce.
Beyond that, what your company represents and your internal behaviors and practices can also play a significant role in the customer experience. Again, this is your values and your beliefs — and not just how they are shown in your marketing, but how you genuinely put them into action every day with your internal company practices.
How Diversity and Inclusion Can Improve Customer Retention Rates
Two of the most important values for customers today are diversity and inclusion. This new and younger generation of consumers is more ethically-driven. As such, they prioritize values such as equity, equality, accessibility, inclusivity, and diversity. They want to see these values reflected in the marketing and overall business practices of the brands they support.
If they don’t see these values, they are quick to place their loyalties elsewhere. In other words, if you aren’t an inclusive, ethical, and diverse brand, you are likely to experience low retention rates.
However, diversity in the workplace does more than just make your customers happy. Diversity can:
• Increase your access to talent: Not only do customers consider diversity important, but prospective employees do as well. When looking for a job, applicants look for companies that are more diverse. This means companies that commit to diversity are more likely to attract more applicants and top talent. And, of course, when you attract top talent, you create teams that are more skilled and productive, which means they will be better at providing quality experiences to your customers.
• Improve empathy: The world is a diverse place. Thus, if your company reflects that diversity, you will more easily connect with your customers. A diverse workplace is more empathetic towards customers because it is made up of people who can relate to your customers. And if your employees can relate more to your customers, they can build better relationships and, again, provide better experiences.
• Drive innovation: A diverse workforce means diverse thinking. If your company is homogenous, you can have a harder time being creative and solving problems because everyone thinks alike. But if you diversify your company, you have people that come from various walks of life with various experiences, which means they can all bring something new and unique to the table, which is essential when you are trying to innovate.
• Accelerate growth: In addition to diversity improving innovative thinking, it can also promote a wider perspective on a variety of other things. When you have team members with diverse and unique perspectives, they help your company better recognize new opportunities and areas for improvement, such as customer needs, overall company well-being, and product improvements. And the more you make improvements and seek out new opportunities, the more you can accelerate the growth of your company.
How To Create a More Diverse Company That Fosters Better Customer Experiences and Retention
It’s one thing to know you need to be a diverse and inclusive company, but it’s another thing altogether to put it into action. Here are some tips on how you can improve diversity and inclusion in the workplace.
Implement Diversity Training
One of the best ways to create a more welcoming and inclusive workplace is to conduct some form of diversity training. This can help teach your staff how not to be discriminatory and how to recognize when someone else is discriminating.
This can include teaching staff how to understand bias, how to handle sensitive issues, what to say or avoid saying, and how to act. The idea is to make them more aware of how discrimination can occur and how to avoid it.
It’s also important to teach your staff to speak up when they recognize someone is being treated unfairly or discriminated against. This includes racial discrimination, gender discrimination, sexual identity discrimination, and ableism.
It’s not just important to ensure your teams are racially diverse but also gender diverse and neurodiverse. Lots of people today are neurodivergent, for example, but there is still much that people don’t understand about what it means to be neurodivergent.
Thus, it’s important to make sure your staff are aware of all differences and how to be more mindful and accepting of them.
Companies that work hard to encourage good communication and collaboration tend to create employees that are more accepting of one another’s differences. A collaborative mindset encourages people to find ways to work together not despite their differences but to use their differences to help them succeed.
As mentioned above, diverse teams are better at innovation because you have a variety of employees that can bring unique ideas and ways of thinking to the table. And when you encourage those employees to work together collaboratively, you can achieve so much more.
Use Inclusive Language
Language is essential when promoting diversity and inclusion. Someone might be accepting of others in their mind, but that doesn’t mean they have the right words to express themselves in a mindful way.
It’s important to not only encourage diversity but to promote the use of inclusive language as well, such as using inclusive pronouns when addressing staff as a group and individually and avoiding words that could be considered racially discriminatory.
This can be taught in training, reinforced by managers setting an example, and even by posting signs or posters around the office that use inclusive language.
Of course, one of the best ways to create a diverse and inclusive workplace is to use inclusive hiring practices and promote equity in things like pay and benefits. For example, if the men at your company get paid more than the women on average, or if BIPOC employees get paid less on average, it’s likely time to reevaluate your pay structures.
Just because your company looks diverse does not mean it is treating everyone with inclusion and equity. Thus, make sure you are diverse and inclusive from the inside out.
Diversity is crucial and can play a significant role in customer retention. The more customers see themselves and their values reflected in your marketing and your internal practices, the more likely they are to stick around and remain loyal to your brand.