Retaining customers is just like being in a long term relationship. When you are in any sort of relationship with someone you need to follow a few rules to make sure that the person you love won't believe that the neighbor's grass is greener, and eventually leave you broken hearted.
With customers is pretty much the same. If you fail to give the appropriate support you might end up empty handed and this means high churn rates and, as a result, money loss.
So why do you need to prevent churn? For the same reason that you need to be faithful, for example (unless you are in an open relationship, of course): because if don't, you're at great risk of losing your loved one, or your beloved customers.
The problem is that this is never an easy task. First of all, you need to know if and when your customers are on the verge of churn and why they're slipping away.
If you are losing subscriptions, it means you are losing revenue. Let's face it: no company wants that. In fact, I believe now it's time to show you in numbers why it's so important to learn how to retain customers.
According to Forrester research, it costs 5 times more to acquire new customers than it does to keep the existing ones. To make the matter even more serious, a Harvard Business School report claims that, on average, a 5% increase in customer retention rates results in 25% – 95% increase in profits.
5% increase in customer retention rates results in 25% – 95% increase in profits
Need more info? According to Gartner, a staggering 80% of a company's future revenue will come from just 20% of its existing customers. Meanwhile, Marketing Metrics claims that the probability of selling to an existing customer is 60-70%, and only 5-20% to a new prospect.
So it makes perfect sense that you try your best to retain your customers. To help you keep your relationships in good shape, here are some infallible customer retention strategies.
Action plan to retain customers
Relationships are like battlefields: if you don't have a well-designed plan you will lose your territory. So prepare for it. You need to follow a few simple rules to keep the flame burning.
First of all, you need to understand your partner: learn about his/her needs, wishes, expectations, etc. Only with that info, you'll be able to act accordingly. The same goes for your clients. To provide a better customer experience and keep them satisfied, you have to know their exact profile. Who are they? What are their expectations with your product? What solutions are they looking for? And so on.
When you know who you are dealing with, it becomes easier to:
Simplify the onboarding
Remember the first date? I am sure you did everything to impress and ensure that the person you were interested also found you interesting, right? Bingo! This is pretty much the onboarding for new customers.
While customer retention isn't typically looked at as part of the onboarding process, it actually plays a very important role. You only get one chance to make a great first impression and win a customer for life, so take time and make an effort to turn onboarding into something simple and delightful.
Create segmented content
It's almost like choosing the tone to approach your partner. Is he/she the romantic type or does he/she prefer a more straightforward communication? Should you send flowers on your anniversary or choose a more practical gift?
Understand your audience to create personalized content that will resonate with them. Segment your clients according to whatever criteria seems relevant to your company and then start to send personalized content to specific groups in the most appropriate channels.
Offer personalized services and products
With a complete behavioral profile, you can provide timely and relevant offers according to your customer's preferences and needs. It becomes easier to predict future patterns and pinpoint what they are most likely to accept and which experiences are most likely to enhance their loyalty.
If you ever tried to give a personalized gift to your partner, you know what I'm talking about. There's nothing as powerful as a customized present to melt your love's heart.
Build a meaningful relationship with your customer
I'm sure that you had one or two discussions that involved communication issues. The classic "you are not listening to what I am saying" ring a bell? Well, to keep a healthy relationship you need to listen and talk, of course.
And, in order to build a trustworthy relationship with your customer, you also must pay attention to all your customer's actions and interactions. What your customers are saying about your brand and how are you responding to it?
Remember that this is an ongoing conversation, an opportunity to learn a bit more each time you “communicate” to a customer. Maximize customer value and become more customer-centric. Show your clients that you know them on a personal level and deliver experiences that show that.
Upselling is always a win-win situation as it deepens the relationship and increases the Customer Lifecycle Value. Besides, is an extra chance to increase customer satisfaction, and therefore, client retention.
Upselling is always a win-win situation as it deepens the relationship and increases the Customer Lifecycle Value
Create reengaging automation flows
With the right data in hands, you can also create reengaging automation flows to try and bring back inactive customers. Remember that if your customer is only inactive, he/she hasn't left your company yet so you can still revert the situation. Revive the old flame. To build effective re-engaging flows is imperative that you understand your customer's behavior within your product.
How often are they using it? What features are the most accessed? There a few platforms that can help you with that. By knowing exactly what are the difficulties faced by your customers you can build strategies to help them out and ensure that they stay around for longer.
Bear in mind that every relationship has its ups and downs and it's up to you to keep the flame on. Find ways to satisfy your beloved ones and see the rewards that come with it.
Promote a referral program
You know when you have those huge fights with your partner and you ask a friend in common to go intercede for you and tell your boyfriend/girlfriend about all your qualities? Well, referrals work the same way.
They are always a good strategy to retain clients. Simply because people love incentive. After receiving a reward, most customers feel obligated to bring in new ones. Better yet, customers are less likely to leave a company or change a product if the friend who referred them is still a satisfied customer.
According to a research from Nielsen's Global Trust in Advertising Survey referred customers are 18% more likely to stay with a company than non-referred customers.
Time to get your hands dirty
Once you recognize that you may be losing way too many customers then you should, it's time to implement the changes listed above. Of course, it does take some time to have everything running smoothly, but to have a low churn rate, it does pay off.
Start slowly. Change one thing at a time. Keep your data updated and analyze every little metric that might seem relevant to your company. Tweak your strategy whenever you need to, always with your goal in mind: customer retention.
Adjustments are inevitable in any sort of relationship, whether it's with a customer or a partner.
The right marketing automation platform can help you in the entire process, from the moment you realize you have a problem, until the final stage of the customer journey. You can easily measure your data, segment your clients, automate your flows, send personalized campaigns and so on.
You should start to retain your customers from the very first moment that they become a client. The sooner the better. Don't wait until things are already downhill to make a move. It might too late.
Once again, remember that churn is the biggest villain that you might face and it is a tough one to defeat. So raise your weapons, save your customers and guarantee your happily ever after.