Tag: customer retention

08 Dec 2016
customer-retention-strategy-for-happy-customers

Six customer retention strategies that will grow your business

A funny thing happened when researchers asked consumers and marketers associated with the travel industry how they viewed the industry’s well-known loyalty programs. Both camps gave the concept a thumbs up, to be sure. But that doesn’t mean they saw eye to eye. Far from it. Still, it turns out that there’s an important lesson to be learned from what proved to be the sharply diverging perceptions of the buyers and the sellers.

For the marketers – 66 percent of them – the programs were seen as a good way for customers to show loyalty to the brand. Seventy-three percent of the consumers, however, flipped the perception, looking at the programs as a great way for companies to show loyalty to customers.

Oops!

The study, reported in the Harvard Business Review, says a lot about how customer retention strategies can go awry when customer-centric principles get turned inside out.

How to retain these customers? Look at the brand through the consumers’ eyes

That’s not to say that loyalty programs are not an important element in the retention strategies toolkit. They are. The trick, though, is keeping the focus on the customer through proven customer retention strategies such as these:

  • Yes, consider a customer loyalty program. Just keep in mind that loyalty is a two-way street, and the way to actually engender loyalty is to make an emotional connection with a person. Today’s analytics and CRM solutions make it easy to truly get to know your customers and leverage that technology to reach out proactively to demonstrate your loyalty to your customer, with a reward, a special offer, a personally tailored email, or a follow-up to a transaction.
  • Appreciate the value of regular newsletters. They not only put your brand in front of your customers consistently, but they are still at least twice as likely to convert as social media traffic (2.5% vs. 1.3%), according to a report from Monetate.
  • Don’t put all of your energy – and marketing budget – into chasing after elusive new customers when your best prospects may be right before your eyes. A large portion of your inactive customers may be responsive to your targeted outreach to bring them back into the fold. Comprehensive customer retention strategies should recognize that lapsed customers are potential returning customers, with the right approach at the right time. Offer them an incentive to return.
  • Your customers are likely to be active on social media, and that means you should be, too. Chances are good that the people who “like” or “follow” your brand feel an attachment to it. That gives you a golden opportunity to further build the relationship, and perhaps build a committed brand ambassador along the way. Perhaps unexpectedly, one company that is showing the way on social media has its roots in the nineteenth century. General Electric has established an award-winning presence on Vine, Instagram, and Twitter, turning its tech products into compelling human stories.
  • Get in touch and keep in touch, with the help of scheduled and automated emails, social media and blog posts, newsletters, coupons, and personal outreach like a birthday greeting or a thank you email. Remember, too, that all contact from a customer is good contact – even the complaints. Be glad they are telling you what went wrong, because that gives you the opportunity to make it right, turning a bad situation into one that actually increases trust and loyalty.
  • Provide exceptional customer experiences. No matter how many special programs and personal touches you include in your customer retention strategies – that is the one factor that will always be at the heart of customer satisfaction and loyalty. Take care to monitor customer experience at every touchpoint on the customer journey, and to make improvement an ongoing process rather than a one-time fix.

Why customer retention strategies are key to growing a business

Just do the math. For one thing, it costs a lot more to acquire a new customer than to keep an existing one – the actual number varies by industry, of course, but a good rule of thumb is that a acquiring a new customer costs five times as much as making a new sale to an existing one. And that’s not all. Famously, Bain & Co. calculated that just a five percent increase in a business’s customer retention rate results in increased profits of between 25 percent, nothing to sneeze at, to as much as a whopping 95 percent.

Add to that the fact that a company that retains about 80 percent of its customers over the course of the year, and manages to acquire about 20 percent new customers (both figures are in the average range) is just treading water. On the other hand, if that company can increase its customer retention rate to 90 percent, the same 20 percent acquisition rate will result in a doubling of the customer base in seven years.

The very best way to develop and retain a loyal customer base

It wouldn’t be an exaggeration to say that the best customers you’ll ever have are the ones you have today. Yet businesses commonly pour their marketing resources into courting new prospects who are far less likely to make a purchase than existing customers, or even lapsed ones – and far less likely to become the loyal customers every company hopes for.

Maybe the psychology behind it is as simple as familiarity breeds contempt. Once we have acquired a customer we begin to take them for granted. We forget, as those travel industry marketers did, that the brand needs to be loyal to them if we want them to be loyal to the brand.

20 Oct 2016
bots help with personalization for customer service race

Are you in it to win it? What’s after Email Subject Personalization?

Whether you noticed that checkered flag waving or not, you’re part of a race. Attracting customers, keeping their attention, and providing the right product or service for their needs are all markers on the race track of a successful business. But if you think there’s a victory lap and a raised trophy in the near future, you’re falling into a common trap. The circuit keeps on going, and there isn’t a finish line in sight.
Losing sight of existing customers in the hopes of attracting new ones is like starting the race over from scratch when you’re already moving at 120MPH. Not only that, but it will cost you dearly, when customer acquisition uses on average 7x as much of your budget as customer retention does.
As well as the costs involved with driving new traffic, new customers are much less likely to result in conversions.
Think about how likely you are to buy something when you’re browsing online on a new website or with an unfamiliar retailer. Unless you have had a personal recommendation, most of the time you return to an ‘old faithful’ that you trust and have a history with. As a business, you can’t afford not to capitalize on that feeling.
Your marketing budget, often sucked up by a drive for acquisitions, could be better used to retain old customers and encourage them to repeat the experience with you. And it’s easier to do! A raised retention rate of, say 5%, is proven to have a massive effect on profits, by as much as 90%.
In addition, loyal customers don’t just come back for more, they also tell their friends about you. Word of mouth or social media sharing are some of the most powerful ways to get new business. Remember that personal recommendation mentioned above? The right online chatter by a satisfied customer on a large Facebook group, or a well-timed tweet from a prolific Twitter user who was impressed by your customer service is like gold dust. It could be far more effective than blowing your marketing budget on getting footfall to your online store, only to fall at the conversation rate hurdle anyway.

The Building Blocks of Customer Service Relationships

But how do you keep customers coming back for more? Offline, it’s fairly simple to make customers feel valued and important. When Starbucks began writing names on cups for their customers, Forbes called it a “wise business practice” and here’s why.
The majority of customers respond positively to their names being used, both verbally and in writing. It also helps the barista form a personalized relationship with the customer. As well as remembering their order and preferences, this can even give them a link to recall information about their personal lives. Double Java Chip Frappucino for Lara whose toddler spilt his kids’ hot chocolate over three other customers last week?
This is simple personalization, and if you’re not talking about it for your business, you should be. Personalized customer service goes a lot further than remembering a handful of names of course, or remembering what muffin is your customer’s favorite. Customers now expect you to anticipate what they want before they know it themselves.
In brick and mortar stores, a good staff member will excel at remembering customers by face or name. They might have a wide knowledge of their product lines and be skilled in building a rapport with customers they recognise as their ‘regulars.’
In e-commerce, with thousands of products as well as international retail opportunities, this level of service and personalization can feel more difficult to achieve. But in a world where 71% of online consumers have ended their relationship with a company due to poor customer service, it’s just as vital as offline, if not more so.
The Internet is a faceless beast at times. But customers still want to feel appreciated and remembered. And the next era of personalization goes a whole lot further than your name in the subject line of an email.

Personally Speaking

Anne Fisher believes support bots are one excellent solution for this. “Customers increasingly expect experiences that are immediate, simple and personal. Bots have the potential to deliver all three.”
Unlike a human assistant online, a support bot has the ability to look over your entire product catalogue. They can also scan each individual customer’s order history and unique preferences. They can hone in on keywords, and even cross reference against special offers and stocklists.
They can also do all of this immediately, in multiple languages, and without delay. This means better information, more scope and accuracy, and no hold times.
Live chat is proven to be effective in responding to questions and helping customers troubleshoot problems. In fact, many customers expect nothing less when using an ecommerce site, and the 18-34 demographic even prefer it to a phone call.
But support bots can use data to take this a step further, anticipating queries before they even come up. Many will now offer personalized recommendations and suggestions to customers based on past or present behavior.
Imagine you purchase airline tickets for you and your spouse online. Your banking bot, anticipating a need, sends you current exchange rates for your destination currency. A service like Airbnb suggests quirky or fun accommodation in the capital based on the last places you’ve booked. Knowing it’s your birthday while you’re away, you may be offered ideas for romantic places to celebrate. The opportunities are truly limitless for personalization.
68% of customers go elsewhere because they perceive that you as a company are indifferent towards them. With many businesses focusing purely on customer acquisition instead of retention, they aren’t wrong either! As part of a multi-channel customer service network, support bots can help you limber up, get in the race, and use personalization to stay ahead of the competition.