Which is easier: customer acquisition or customer retention? How much does your company spend on each?
90% of participants in this People Metrics Customer Experience survey agreed that customer retention is strategically imperative. So, why did only 50% report having a budget solidly established for customer retention?
Think of your company’s marketing budget. Where is the bulk of it targeted? Are you spending more on acquiring new customers, or are you focused on improving your customers’ experience? Are you prioritizing customer retention?
If not, how can you start?
Let’s talk about the specific challenges of customer retention marketing, learn the basics of establishing trust around your brand, and explore the secret weapons smart companies use to keep customers happy and loyal!
Common Roadblocks to Creating Customer Loyalty
Do you have a box of healthy cereal in your kitchen? Grab it and read the back panel. Read the heartwarming story of the brand’s origins and core values. Read about their farm-to-table grains and sustainable harvesting standards. After all, this is why you purchased this cereal, correct.
No? It’s because the cereal was reasonably priced, tastes good, and was convenient to buy? Hmmm.
For a while now there has been a glaring difference between what marketers believe cultivates customer loyalty, and what is actually important to customers.
What marketers believe cultivates customer loyalty:
What is actually important to customers:
Marketers love to tell a good story and sell a brand’s culture, but customer loyalty is actually created by providing consistent value, quality, and convenience; all while being attentive to your customer and keeping them engaged.
According to a 2008 study, the main reason a business loses customers is perceived indifference. One of the biggest customer loyalty challenges is to provide personalized customer experience and make every customer feel understood and valued. How can your marketing team do this?
In the past, customer personalization on a broad scale was too big a challenge to implement. You would need a spreadsheet upon spreadsheet to manage your data; and particularly after ‘big data’ came into play, companies weren’t ready to utilize it effectively. Database systems could manage structured data but unable to give meaning to the mountains of unstructured data streaming in.
The good news is, things are changing.
Now it’s possible to take that streaming unstructured data and automatically personalize it on a mass scale. The Single Customer View organizes detailed data for each of your customers and updates it in real time. Using this you can market much more effectively for customer retention.
The sky is the limit with the Single Customer View tool. Marketers can break down customers into segments, and then target those segments with specifically designed campaigns. Buying behavior can be tracked and better analyzed. Your customers will feel more connected to your brand than ever!
Just How Important is Customer Loyalty?
It may feel like quite a challenge to build a customer-centric company. But the rewards are definitely worth it. For example, do you recall how Amazon started? It went from a humble online bookstore to spanning industries, acquiring other large businesses, and becoming a household name. Here’s what Jeff Bezos has said about Amazon’s approach:
“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every aspect of the customer experience a little better.”
Because they are dedicated to the customer, Amazon and other industry giants have experienced customer loyalty payoff. By creating a practical premium service, Prime, Amazon has increased its customers’ spending exponentially: on average, Prime customers spend 4.6 times more than non-Prime customers.
If a significant percentage of your customers spent 4.6 times more with your brand, what would it mean for your company?
Using the Data to Activate Customer Loyalty
With a better way to focus on customer personalization, you can empower your marketing team to focus on customer loyalty. Monitor your company’s customer retention week-by-week, measuring your performance in these areas:
- Engaging new visitors
- Converting those visitors into buyers
- Converting those buyers into repeat spenders
To do this, you first need technology that can gather and organize large amounts of accurate data. Then you need to use that data to create meaningful marketing campaigns.
Here are three examples of software ‘secret weapons’ you can use:
1) Omni-Channel Communication
Do all of your customer-facing departments talk to each other? If multiple customer interactions are not tracked in one place, it can lead to uneven and inconsistent customer experience.
You need a tool that brings your marketing channels together so that your customers have a consistent experience no matter which phase of buying they’re in. This is called Omni-Channel Communication.
Omni-Channel Communication can automate certain actions to respond to scenarios. It can assign specific customers to the same agent, ensuring smoother customer interaction. And as we know, a consistent experience is one of the top four factors in fostering customer loyalty.
2) RFM Lifecycle Automation
Even loyal customers sometimes disappear without a trace. But you can reduce this risk by using data based on Recency, Frequency, and Monetary value to segment your customers and create effective marketing campaigns for those segments.
This style of marketing relies on customer lifecycle management. It tells you exactly when to offer the right incentive (based on your data), and ensures that your loyal customers stay that way!
Using RFM analysis, target your loyal customers who have not purchased in a while. Set up a trigger to send an incentive such as a half-off deal or gift with purchase.
Roughly 65% of a company’s business comes from its existing customers, and you can capitalize on this.
3) Personalized Communication and Recommendations
Every customer is different. You have first-time buyers, loyal customers, and everyone in between; should you send the same message to all of them? You can use segmentation to send more personalized recommendations to specific users. Collaborative filtering, a recommendation method, compares customers with similar buying habits and helps you predict which products those customers will like most.
Customer (Retention) is King
A successful marketing team will place customer retention as a top priority. Loyalty campaigns today are powered by technology that makes it easy. Most businesses rely on email marketing to retain customers; now you can personalize that communication more effectively using marketing automation. Explore the numerous strategies and software tools that are now available, and reinvigorate your customer relationships!
