We have talked about customer retention on this blog before. And we will talk about it again. After all, there are very few things that have as much impact on the growth and health of your business as retaining your customers. From contributing to the revenue and margins to bolstering up your brand presence and authority, retaining your customers leaves its impact everywhere you look.
So. As Mr. Cumberbatch says,
First, a quick recap on what exactly is customer retention
Simply put, customer retention is a strategy or a gameplan to get more of your customers to stay loyal to your brand and your product and continue using it for longer periods of time.
Successful customer retention strategies tend to turn one-time shoppers into repeat customers who make frequent transactions, and spend more on your product and services, increasing their lifetime value to the brand. Spectacularly successful retention strategies tend to turn a segment of your customers into vocally loyal supporters of your brand who serve as your champions, referring your product to their friends and social circle.
Whether you acquire your customers through paid ads (Facebook, Google etc.) or apparent free channels (content marketing, organic), there is always a cost attached to it - whether in terms of direct marketing dollars spent, or the time and money spent in creating that organic presence. So, the more your customers spend on your product and services, the more revenue you make for every dollar spent on customer acquisition. This boosts your profitability thereby driving a sustainable, long-term path forward for your business.
So, what can you do to retain customers?
#1. Know your customers
Some businesses will use CRM softwares to have a clear visibility on their customers. Who they are, where they come from, and how the business is engaging with them.
While CRM tools help a lot in streamlining your overall customer outreach initiatives, it is upto you whether you want to use one or not. Using the tool is optional, as long as you are handling the underlying reason for using a CRM tool in the first place - to understand your customers better.
The only thing you need to focus on, to improve customer retention, is delivering a delightful and amazing experience to your customers. And that is where knowing your customers becomes crucial.
If you have a fair idea of what makes your customers tick, then your approach to every customer outreach initiative can be centered around offering your customers the value they seek, thereby helping them see the immense value your product is adding to their lives. The more they are able to draw parallels between the value-prop of your product and their own workflows, the more likely they are to stick around and continue reaping the benefits. You can’t do that unless you have a deeper and holistic understanding of your customers.
The better you understand your customers, the easier it would be for you to identify the macro identifiers for different customer segments and sub-segments, making it possible for you to have more targeted audience targeting, better performing landing pages, and content that’s aligned with your target audience’s search behavior and research and discovery process. Not only will this improve the conversion of your paid campaigns, it would also, in time, help increase the percentage contribution of organic traffic to overall customers acquired. And since these customers are being acquired by delivering to them a message they can relate to, the probability of them getting immediate value from the product is much higher resulting in more product usage from the get go. All of which contributes to retaining more and more of the customers acquired via any channel.
#2. Give your customers relevance and quality scores.
Many businesses assign quality scores to their leads. This forms the basis of segmenting their leads into marketing qualified leads, sales qualified leads etc. It is a simple methodology to rate your leads based on how frequently they are engaging with your brand and its content, what are the different touchpoints where these engagements are happening, and what do these touchpoints tell you about the interest level of the leads.
The more engaged a lead or a customer is with your brand, the higher is the likelihood of them sticking around for a long time. The most engaged customers are who would eventually become stalwarts and champions of your product. So it makes sense to score your leads and classify them differently based on the value they could bring to your business.
But, there is another way in which scoring your customers can help your business.
Try to get a better sense of who your most valuable customers are, and what are their defining traits. What are their usecases, and how is the product helping them with these usecases. Getting a better sense of the usage behavior of your top-rated customers will prove invaluable in your efforts to acquire more such customers - customers who would be just as likely to stick around for longer periods of time, and who would be deriving more and more value from the product frequently, thereby being engaged and loyal customers of your product.
#3. Rated your customers? Now, do the same for your product.
Entrepreneurs tend to go overboard when it comes to deciding the different components that should be a part of the product and features it ‘needs’ to have. It not just complicates the product usage and broader user experience, it also tends to obscure the visibility of the most promising components of your product.
So, make a couple of lists. For example, a list of the different components in your product. And then, rate them based on how much they are being used.
You could use your own formula to assign scores, but the way I like to do it is to give them weighted scores - with components being used by my top-rated customers receiving the highest weighted scores.
This helps you on multiple fronts. It helps your product team refine and fine tune their product roadmap into focusing in the direction that is most likely to delight the customers thereby having the maximum impact on your product usage. It also helps your marketing team in knowing what parts and usages of the product needs to be communicated the most to increase the conversion rates across different marketing channels. It helps your content team in figuring out what kind of content needs to be produced more frequently, and what should be the overall nature, type and tone of that content.
#4. Reward loyalty
Unlike traditional belief, loyalty programs do not always need to be referral in nature.
Sure, referral programs work great, if your customers love your product and are getting good value out of promoting it in their circles. But this process is most of the times synchronous. Customers will evaluate the worth of the reward after they have evaluated whether your product is something that they want to get behind and add their name to. So, it is a classic chicken and egg situation for early stage businesses. Before you can introduce a referral program, you need to build a product your users love themselves.
So how do you reward loyalty in the meantime?
By helping them out with their workflow as much as possible. Right from having an intuitive product to a good documentation that helps them with different scenarios to being prompt, detailed and helpful with their support requests. It all leaves an impression. It helps present a more favorable view of your brand as one that’s focused on its customers at all times.
And then, there are product requests.
Your customers will help shape up your product’s roadmap in a way that makes the most sense for the business. Not all product/feature requests would be something that can be included in the product rightaway (or in some cases, at all), but give your customers a way to request more features/value out of the product, and be responsive to these requests. The more transparent you are about this whole process with your consumers, the more connected they will feel to you, your product, and the business.
#5. Think of customer support as an extension of your growth team
As we discussed at the very beginning, the most crucial factor in achieving retention is delivering a delightful experience to your customers. And that covers the entire lifecycle of your customer, so it naturally involves your customer support as well.
Most customers leave a product if they are unhappy with the post-sales service and support offered by the brand, so this is one aspect you can’t afford to drop the ball on.
Be responsive, honest, transparent and empathetic. Try to understand your customers’ needs and pain-points before you offer a solution. And definitely do not offer templated boiler plate responses - specially when a customer is having a bad experience. It just adds fuel to the fire. (Imagine how you feel when you have been given such responses by reps of brands you are a customer of.)
Customer retention is a topic that will encapsulate different functions and aspects of your business, so it helps to continuously ask the question - “What would make my customer’s experience better?” And then let that be the guiding light for you. Just consider a simple example. Traditionally CRM is not associated with customer retention. Customer retention is looked upon as a part of the marketing functions, and CRM is viewed as a tool meaningful for your sales functions and sales team. But the reality is, customer retention is a facet of your business that pretty much asks for an ‘all hands on deck’ approach. From sales to product, from marketing to customer support, they all play a crucial and integral part in both formulating and executing your retention strategies.
What customer retention strategies do you use in your business? Let me know.
That’s it for today, see you tomorrow.
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