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What is customer communication and why is it important?
Inna Sabada
by Inna Sabada
What is customer communication and why is it important?

Understanding Customer Communication: Delving into Its Definition, Key Components, and the Crucial Role It Plays in Business Success and Customer Retention


Good customer communication is a cornerstone of any successful business. Whether you're a small business owner or the CEO of an international corporation, communicating effectively with your customers is essential for establishing trust and creating long-term relationships.


Customers want to feel valued and respected by businesses they purchase from; strong customer communication can go a long way in terms of building loyalty and generating repeat purchases. In this post, we'll take a look at what exactly customer communication is, some best practices for engaging with customers through various channels, and why it's so important for your company's success.



What Is Customer Communication?


customer communication


Customer communication is the process through which businesses interact with their customers to establish and maintain positive relationships. Effective customer communication involves understanding the needs, preferences, and expectations of customers and using this insight to provide personalized service and support. This can include various forms of communication, such as phone calls, emails, text messages, live chat, and social media.


In today's digital age, customer communication has evolved to become more sophisticated, and businesses are expected to be available and responsive to their customers 24/7. Companies must utilize multiple communication channels to keep up with the changes in customer behavior and preferences.


Moreover, efficient customer communication is critical for businesses to increase customer loyalty and retention. It helps companies to build trust and connects with the customers at a deeper level. Businesses that prioritize customer communication can also benefit from valuable feedback and insights that can inform product development, marketing strategies, and long-term planning.



What is the customer retention rate?


Customer retention rate refers to the percentage of customers who continue to do business with a company over a certain period of time. It is a metric used to measure a company's ability to retain customers and keep them coming back for repeat purchases. A high customer retention rate indicates that a company is successful in retaining its existing customers and building long-term relationships with them, which is often seen as a key factor in driving sustainable business growth.



How to calculate customer retention rate? Customer retention rate formula.


To calculate the customer retention rate, you need to follow these steps:


1. Choose a specific time period (e.g. a month, a quarter, or a year).


2. Determine the number of customers you had at the beginning of that time period (C).


3. Determine the number of customers you had at the end of that time period (E).


4. Determine the number of new customers you acquired during that time period (N).


5. Calculate the number of customers you lost during that time period (L) by subtracting E from C and adding N (L = C + N - E).


Use the following formula to calculate the customer retention rate (CRR):


CRR = ((E - N) / C) x 100


This formula takes the number of customers you retained (E - N) during the time period, divides it by the number of customers you had at the beginning of the time period (C), and multiplies the result by 100 to get a percentage.


For example, if you had 500 customers at the beginning of the year, acquired 100 new customers, lost 50 customers, and ended the year with 550 customers, your CRR would be:


CRR = ((550 - 100) / 500) x 100 = 90%



Why Is a Customer Communication Strategy Important?


Having a customer communication strategy in place ensures that businesses have a clear plan for how they will engage with their customers. It allows businesses to set specific goals and objectives for their communication efforts, and to determine the most effective channels for reaching out to customers. A well-planned communication strategy can also help businesses to personalize their messaging, making it more targeted and relevant to individual customers.


There are a number of reasons why a customer communication strategy is important. 


✅ First and foremost, it helps to build customer loyalty and trust. By engaging with customers over time, communicating changes in products or services, and soliciting feedback, businesses can foster long-term relationships and ensure that their customers feel valued. This can help to improve customer retention rates and ultimately lead to higher revenues.


✅ A customer communication strategy also helps businesses to improve their operational efficiency. By streamlining communication channels and processes, businesses can save time and money, as well as reduce the potential for errors or misunderstandings. Moreover, by collecting and analyzing customer feedback, businesses can identify areas for improvement and make more informed business decisions.


✅ Finally, a customer communication strategy can help businesses to stay ahead of competitors. By leveraging customer insights and feedback, businesses can differentiate their products and services, and develop new ideas and solutions that meet the evolving needs of their customers. This can lead to increased customer loyalty, positive brand reputation, and ultimately higher revenues and profits.



3 Examples of Great Customer Communication


1. Zappos: Zappos is known for providing exceptional customer service, and their communication with customers is a big part of that. They have a team of customer service representatives who are available 24/7 to answer any questions or concerns customers may have. Zappos also sends personalized follow-up emails to customers after they make a purchase, thanking them for their business and offering assistance if needed.


2. Slack: Slack is a messaging platform used by teams to communicate and collaborate. They regularly send out updates to their users to inform them of new features, bug fixes, and other changes to the platform. Their communications are clear, concise, and informative, and they make it easy for users to stay up-to-date with the latest developments.


3. Patagonia: Patagonia is a clothing company that is known for its commitment to environmental sustainability. They communicate this commitment to their customers through various channels, including their website, social media, and marketing materials. They also provide regular updates on their efforts to reduce their environmental impact and support environmental causes. By communicating their values and actions to their customers, Patagonia has built a strong and loyal customer base that shares their commitment to sustainability.



🔹 As we have seen, customer communication is essential to maintaining good relationships with customers and achieving business success. It helps build trust, improve customer satisfaction and brand loyalty, and give customers the opportunity to provide valuable feedback. 


Good customer communication should involve personalized messages that respond quickly to customer needs and inquiries. This can be accomplished through various strategies such as email campaigns, timely response systems, and social media engagement. 


Furthermore, companies must also create an environment that encourages open dialogue between customers and staff members. When used properly, customer communication ensures a steady flow of transactions for businesses and an enjoyable experience for customers. 


Employing these practices will ensure that you are providing the best possible customer service and creating long-lasting relationships with your customers.



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