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It’s no secret—retaining customers is less expensive than acquiring new ones. In a crowded world where clicks and conversions come at a hefty price point, focusing on each stage of the customer journey is critical to every company’s success. But real revenue growth lies in keeping your current customers.
When was the last time your organization mapped out your customer journey? If you haven’t focused on marketing to customers after the point of sale, you’re leaving opportunity on the table (and a lot of it). Let’s take a look at how to get started.
Customer Retention: What Is It?
Customer retention is the collection of activities a business executes to increase the number of repeat customers and to increase the profitability of each existing customer.
A customer retention strategy typically serves a dual purpose. First, it keeps your brand top of mind in an effort to increase presence and profitability. Next, it leaves your customer feeling pleased after every interaction with your brand.
But before you can jump into nurturing your customers with an exceptional experience, you need to first understand why you’re losing any in the first place.
Conduct a Churn Analysis
The first step to retaining customers is understanding why they ever want to leave. Sometimes reasons are beyond your control. It could be they weren’t your ideal customer, their boss made the final call, or they can’t afford you. But research shows that isn’t typical.
In fact, 42% of consumers have left a business due to something as simple as poor customer service. So why are your customers leaving you? Run a customer churn analysis to find out.
Here are three steps for an effective churn analysis:
1. Ask for feedback
When a customer decides to terminate their service with you, reach out with a personal email and ask them why. Asking for this feedback is a great way to determine whether there are any customer complaints. If there are, you can work on improving those issues.
Keep in mind taking negative feedback is difficult. We’ve all experienced this, whether it was from a boss, a teacher, or a friend. But when it’s coming directly from your customers, you need to resist the natural urge to be defensive. Take everything they have to say into account.
Now, not everyone you email is going to respond. But there are a few tips for getting more (and better quality) responses:
● Keep it personal.
● Send it from someone high up in the company (owner, C-level officer, director).
● Keep it short.
● Use open-ended questions.
● Tell them how important their feedback is.
● Follow up.
2. Analyze the responses
Once you have collected enough responses and start the review process, begin building a set of themes. As you begin to notice patterns among the feedback, start asking yourself the right questions:
● Are we under-delivering on our core value?
● Are we under-marketing the things about our business that excite our happy customers?
● How can we better improve our customer service?
● What are the things our customers value the most when doing business with us and are we delivering that consistently?
3. Take action
The benchmark for customer service is set low: 49% of customers say brands don’t meet their expectations. That’s why after you ask for feedback, taking action to actually improve upon the complaints is crucial! Put into place a strategy that will make your customers happy. Whether that’s a rewards program, customer recognition, or just improving your customer support team, focus on the items that will ensure each experience with your brand is a positive one.
Churn analysis is not a one-time process. Your organization needs to regularly analyze why customers are leaving and continue asking for feedback to improve the customer experience.
Use Automation to Improve Customer Experience
The bigger your organization, the more customer service inquiries you are going to receive.
One customer needs support, another needs to be onboarded, and another left items in their cart without completing their purchase. While every company’s customer needs will look a little differently depending on the product or service being provided, one question remains the same: How can my organization have visibility into each customer’s experience and manage it at scale?
The answer lies in marketing automation.
Marketing automation essentially sends personalized information to your customers based on certain actions they take across multiple channels. Here are a few ways marketing automation can improve your customer retention:
1. Automate Responses & Follow Ups
Whether customers request service support or a free trial, they want confirmation their message was received or their order went through. Marketing automation allows your business to send a personalized and immediate response to keep your customers updated. A few examples include:
● Emailing customers to let them know their request has been received and someone will be in touch shortly.
● Sending customers order confirmations and shipping updates.
● Sending customers calendar invites to book a meeting with a rep.
2. Automate Incentives and Rewards
You can use marketing automation to provide incentives and rewards for your customers. A few examples include:
● Email coupons and discounts once certain milestones are reached.
● Send relevant blogs and support articles based on recent web page visits.
● Provide discounts to customers that left items in their checkout carts.
This kind of timely outreach will not only improve customer satisfaction, but it incentivizes a purchase so you can increase sales.
3. Automate Feedback
Once a customer makes a purchase or has been working with your organization for a certain amount of time, you can also use automation to ask for customer feedback.
There’s a wide range of marketing automation platforms priced differently for companies of every size. This software can house your data, help you segment your audiences, deploy emails based on actions your customers take, and so much more.
Trust us, the investment is worth it. Manually managing these processes will result in disorganized data, hours of manual labor-and worst of all-a terrible customer experience.
Conclusion: Keep Your Existing Customers in the Fold
If you’ve made it this far, we don’t need to reshare the numbers with you.
It costs far more to attract new customers than it does to keep your existing ones. And keeping your customers in the fold starts by investing time and resources into identifying why they leave. It also means developing a strategy that improves the customer experience and automation that simplifies the work.
Need help getting started? OSG implements retention tactics that deliver a bigger bottom line for our customers. Check out our customer retention solutions, and if we can help you, connect with us.