customer retention Archives

In News

Spending the Most Really Does Win the Most Customers. Here’s Why

June 27, 2023 No Comments

Customers are the lifeblood of your business. You don’t want to cheap out when it comes to customer retention.

“Whoever can spend the most, wins.” This is an adage in marketing that happens to be 100% true. If your business is prepared to meet the ever-increasing customer acquisition cost in today’s hyper-competitive digital and traditional media landscape, you are well on your way to dominating the market.

However, this does not mean that you can simply throw money around willy-nilly and hope to get the results you want. Being willing to spend big to win big is great, but it’s only half of the battle. You also need to be strategic about how you spend your money to win over the competition.

Companies with deep pockets that can spend more to acquire a customer will get more customers. If this sounds like you, keep reading to learn the most effective ways to put “whoever can spend the most, wins” into practice.

1. Invest in the right digital media channels

Spending on digital advertising is expected to exceed $600 billion in 2023. Your business needs to be heavily invested in this space if you want to maximize your market share.

Of course, where you spend your advertising budget is an important consideration. Google Ads provides multiple robust pay-per-click campaign options (e.g., text and display ads). With Google Local Services Ads, businesses in select industries can dominate local search results for professional services. You will likely need to invest in social media ads on one or more platforms, too.

All of these channels are highly competitive and, therefore, expensive. However, once you determine how customers find your business (i.e., via organic and paid search, social, etc.), you can start spending on digital ads that will maximize your visibility and drive customers to you over the competition.

2. Don’t ignore traditional media

Investing in traditional advertising (such as television, billboards, etc.) is still well worth your time and money if it means reaching your target customers on a massive scale. Mass media is a tried-and-true strategy for bombarding the market with your message. Not everyone will convert, but spending the money to make your name inescapable will drive far more customers than a limited investment in traditional channels.

We see this with legal advertising. The law firms you see all the time on TV, on bus benches, on billboards, etc., are counting on the millions of dollars they spend to drive multi-million-dollar cases.

It might seem strange to invest in traditional media when digital has taken over the space previously occupied by television and other strategies. However, considering that you are likely thinking of a local law firm’s slogan or phone number, there is no disputing the effectiveness of a major investment in TV and other traditional advertising venues.

3. Invest in your employees

Relationships are a cornerstone of marketing. While much of the discussion centres on engaging customers digitally, you should never underestimate the importance of hiring customer-facing employees, training them to be the “face” of your business, and empowering them to bring you new customers.

This goes beyond fully staffing your office to handle phone calls and emails. Depending on your industry, it might mean hosting community events, wining and dining business prospects, and more.

Customers are the lifeblood of your business. You don’t want to cheap out when it comes to hiring customer success managers, event planners, and other employees who can take your business to the next level.

4. Define your brand

Inconsistency is one of the greatest dangers when making a massive investment in marketing. Although you can distribute your message across seemingly endless advertising channels, your return on investment (not to mention your market dominance) will suffer if the message is unfocused and inconsistent.

Before making a big splash and getting more customers than your competitors, you need to nail down your brand identity and key messaging. The brands people love have a clear identity and a consistent message. They also know their customers and tailor their marketing and advertising to maximize sales.

You don’t have to be a multinational corporation to dominate your market. However, you have to understand your unique offering and consistently communicate to customers why they should buy from you over anyone else.

5. Follow the money

As the saying goes, “Fortune favours the bold.” The businesses with the money and the mindset to shoot for the moon and take the biggest piece of the pie are the ones that typically find the greatest success.

However, your dollars must be tempered with sense. You must carefully identify your target audience by age, demographic, income, buying habits and other key characteristics. In addition, you need to understand what your competitors offer and how you can stand out. Finally, you must drill down on the geographic area you want to target.

With all these components in place, you can develop an intelligent strategy for maximizing the business you gain from a substantial marketing and advertising spend. Both digital platforms and third-party vendors should provide detailed reporting on how your money is being spent, the results of each campaign, and your return on investment.

You won’t achieve dramatic growth if you are overly concerned about being cost-effective. However, a strategic approach that relies on data and tracking only ensures that you spend money wisely. This reduces the customer acquisition cost and results in higher profits.

By Sean Allen

Entrepreneur Leadership Network Contributor. CEO of Twelve Three Media

Sourced from Entrepreneur

In News

Why the Subscription Economy Needs to Focus on Customer Retention

July 28, 2022 No Comments

By Tue Sottrup

In the subscription economy, brands need to react quickly to keep customer churn to a minimum.

It’s no secret that the subscription economy has been one of the fastest-growing sectors in recent years. According to the Zuora Subscribed Institute, 78% of adults paid for subscription services last year in the US.

Yet, in April, we saw one of the world’s biggest players in the subscription economy — Netflix — announce a net loss of 200,000 subscribers globally. In addition, the company expects to haemorrhage a further two million subscribers over the next few months.

Naturally, this raises the question of whether the subscription economy boom is starting to wane, and if so, what brands can be doing to react, keep customer churn to a minimum, and even keep pace with growth projections.

In my view, a key component to this is the service function, and more specifically service agents themselves. Let’s look at why.

Is the Subscription Boom Waning?

Yes, there are caveats to the Netflix case, chiefly that it suspended its services in Russia. Further, it’s seen increased competition from new players in the space, especially Disney+. However, given that the company is projecting to lose even more of its subscribers, it ought to serve as a warning to the rest of the subscription economy.

If we look more generally at this sector, the immediate driver of any stalling in growth and loss of customers is inflation and a rise in the cost of living. For many consumers, getting notified that another subscription charge has been taken from your bank account will only prompt them to probe whether they have extracted value from that service or not.

This doesn’t mean there is going to be a mass exodus from subscription services — there are subscriptions for just about everything these days, whether that’s streaming services, beauty products or food boxes. They aren’t going to just disappear.

However, it is probably going to be the case that we’ll see consumers going through a process of justifying expenditure and asking: is this thing I pay for monthly really of value to me?

We also need to view these changes in the context of more macro trends in consumer behavior. Firstly, the vast increase in online shopping and boom in services that offer convenience as their unique selling proposition has only heightened consumer expectations of brands. In some places, you can now get a full week’s shop on your doorstep in 20 minutes, ordered on your smartphone. These buying scenarios have been accelerated by the COVID-19 pandemic.

Secondly, this has also been coupled with a dramatic drop in the cost of switching to another brand. It is now no longer a huge undertaking for consumers to cancel direct debits and move to a competitor — it’s just one click away. This is probably why, when we spoke to 3,000 consumers across the US and UK last year, we found that just one poor experience is enough for 95% of consumers to consider never returning to the brand.

Overall, then, convenience is at an all-time high, but brand loyalty and the cost and effort of switching is at an all-time low. Add in the new dynamic of the rising cost of living, it’s easy to see this contributing to the loss in subscriber numbers associated with Netflix, and potentially the subscription economy more broadly.

Retention and Customer Service

And when I say the loss in subscriber numbers, what I am referring to is customer churn. This is why it is critical to focus on customer retention. For subscription services, growth and increasing the number of subscribers has been the key objective. But now, with consumer behaviours changing and costs rising, reducing the churn rate and increasing retention and loyalty now ought to be the key objective.

Yes, there are tactical ways subscription brands can reduce churn and increase retention, such as offering customers the option to suspend subscriptions. But, in my view, the customer service function has a key role to play in reducing churn by increasing loyalty in the sector.

In most digital brands today, reaching out to customer service is the only contact a customer has with a brand, and service agents are the ones managing and nurturing these relationships. They are on the front line and are key to shaping the experience of the customer, and as we know, just one poor experience can mean a once-loyal customer churns.

The challenge is that many brands are getting the service function wrong. In the same survey we conducted, the large majority (66%) of consumers we spoke to said companies are still not getting customer service right; hence why they are willing to switch loyalties more quickly. Crucially, we found that some of the key drivers of this disloyalty are everything from having repeating information across different channels, receiving a robotic service and, in general, high effort engagements with agents.

For brands in the subscription economy, reducing churn through driving retention and loyalty will become the new oil. But if your service agents can’t deliver the experience customers want and demand, helping them see the value in your product, then you’ve already lost. So, how can they get on the winning side in a climate where the brand-consumer relationship is more unstable than ever?

Agents as Drivers of Retention

Last year, we also spoke to around 300 customer support staff that work across retail and ecommerce in the US and UK, with 88% reporting that they are currently losing customers due to poor customer support: 46% say it takes them longer than it should to find simple information such as a customer’s order status, while over one in three (34%) of staff still Google customer problems to find the answer.

In my view, this provides a key part of the answer. Convenience is at an all-time high, but brand loyalty and cost of switching are at an all-time low. Where consumers will be reassessing the value of the services they pay for, giving your service agents what they need to protect, build and strengthen this relationship is vital.

The bedrock of this is ensuring they have the right information at the right time. What is this customer inquiring about? How much have they bought from us in the last three months? Are they part of our loyalty scheme? In having the answers to these questions at their fingertips, agents will have all they need to protect, build and grow the relationship, reducing churn rates and increasing retention in the process.

Overall, the successful subscription businesses will be those that focus on becoming even more customer-centric. Not only does this mean giving customers control over managing the subscription relationship, but also having a focus on providing ongoing customer value through the service function across all contact channels. Prioritizing the latter will mean reducing customer churn and driving high levels of loyalty, which will be vital in a period of consumer-brand instability.

By Tue Sottrup

With over 20 years of experience in customer service, Tue is driven by his passion for the industry. Customer experience and engagement is an integral part of any business, and Tue truly believes that software can empower brands to build stronger and longer lasting relationships, as well as dramatically improve the agent experience.

Sourced from CMS Wire

In News

Where is Your CX Leaking Loyalty?

January 5, 2021 No Comments

By Greg Tucker.

Surprisingly few companies track the brand loyalty leakage throughout their customer’s experience to learn where loyalty is “won and lost”.

With over $600 Billion spent on advertising to create brand awareness, drive prospect conversion and build customer loyalty, surprisingly few companies track the brand loyalty leakage throughout their customer’s experience with them to learn where loyalty is “won and lost”.

Our customer journey research efforts with global brands covers four key aspects of the “Path to Purchase”:

Marketing / Prospect Leakage – Turning unaware prospects into buyers and minimizing the “leakage” of prospects from the “Awareness-to-purchase” stage
Sales / Revenue Leakage – Ensuring that customers can spend the full amount of their purchase intention during the sales & renewal journey, and that “Revenue leakage” throughout the customer lifecycle is minimized
Customer Retention / Customer Leakage – Ensuring that customers receive the positive experience that will keep them coming back year after year and renewing their purchases with the company and brand. Especially important in B2B contractual customer relationships.
Customer Satisfaction / Loyalty Leakage – Ensuring that customers receive the “on-brand” experience that results in high satisfaction/NPS scores that drives and sustains positive word-of-mouth” marketing.

Customer Satisfaction / Loyalty Leakage

Our customer journey research for existing customers is designed to answer these questions:
• For a customer starting their relationship with us, what is the “typical experience” they receive from start to finish? What is an “on-brand customer experience”?
• What differentiates the “on-brand experience” and the “typical experience” (or the “off-brand experience”)? What differentiates our experience with the leading competitor’s experience?
• What is the impact of our experience on our customer loyalty metric? What could our full potential of brand loyalty look like if we delivered the “most impactful, on-brand experience”?
• What can be done to improve the customer’s experience, the impact on loyalty and on business results? What improvements have the highest impact?

A popular restaurant company asked us these questions and asked us to identify the “Existing Customer Experience” and where it didn’t meet their expectations. Over 25 factors needed to be assessed as part of the experience – food, service, wait times, price, cleanliness, power & Wi-Fi, rewards programs, specials, etc. Several customer segments needed to be engaged across different restaurant formats and across multiple day-parts (breakfast, lunch, afternoon snack, dinner and late-night snack).

Through qualitative, quantitative, ethnographic, biometric and eye-tracking research, it became clear that the current customer experience was solid, but not stellar. And customer loyalty scores trailed the leading competitor by a wide margin.

The insights that emerged included:
• There were 8 stages of the customer experience journey – and 20 friction points were encountered along the journey – well-known to the restaurant employees – but not prioritized or proactively managed on a systematic basis
• Many of the 25+ factors that were studied had little impact on the customer experience. They weren’t relevant to being “on-brand”.
• There were 4 “moments of truth” along the journey that defined the overall experience. Getting these 4 things right resulted in an outstanding “on-brand experience” – getting them wrong resulted in an “off-brand experience”. 90 points of customer loyalty (NPS) were “leaking” out of the customer journey through a failure to proactively manage these 4 moments of truth.

Linking these insights to business results allowed us to model and quantify the following:
• Focusing on delivering an “on-brand experience” in the 4 key areas (out of 25+ potential areas) of the customer experience results in an industry-leading customer loyalty result, with a measurable and immediate NPS improvement.
• This impact had a 30% improvement in customer lifecycle revenue, based on visit frequency, increased spending per visit.
• Improving the experience would allow the company to expand its customer base within the family members and their friends, making new customer growth faster and less expensive.

By Greg Tucker

Greg Tucker is a Who’s who of Customer Experience and award-winning CX practitioner, advisor and leader for more than 15 years. As CEO of Tucker & Company he consults to Fortune 1000 enterprises and emerging companies on Customer Experience strategies and programs, delivering transformational business results. As a CX Officer and CMO at Copart Auto Auctions, he implemented an end-to-end CX program across all channels that delivered a 20% improvement in Enterprise profitability and received the 2012 CX Innovation Award for delivering a powerful ROI from the CX Program.

Sourced from The Customer

In News

How Marketing Strategy Drives Customer Retention

August 26, 2019 No Comments

By Paul Talbot

Marketing strategy works better when it encourages customer retention. Sound strategy can prevent too many resources from being allocated to customer acquisition and focuses marketers on the potentially significant financial benefits of customer retention.

I recently asked Raji Srinivasan, professor of marketing administration and associate dean for diversity and inclusion at the University of Texas McCombs School of Business, for her thoughts on this challenge.

Paul Talbot: What factors should a marketer consider when trying to strike an optimal balance between acquisition and retention?

Raji Srinivasan: The factors a marketer should consider:

High cost of acquisition of a customer. Ironically, the higher the cost of acquisition of a customer, the greater the need to focus on retention as a lost customer will be more expensive to re-acquire.
Low market share of the marketer. The smaller the market share of the marketer, given a finite set of resources, the greater the need to focus on acquisition of customers.
The stickiness of the product. In some technology products, such as software and social networks, there is stickiness in terms of consumer learning and/or social network connectivity. In those cases, it may be wise to invest in customer acquisition to build an installed base of customers, who will benefit by staying with your product.

Talbot: Could situations arise where retention is more profitable for the marketer than acquisition? If so, what would this situation look like?

Srinivasan: Yes, customer retention can be more profitable than customer acquisition. For example, under the following conditions.

When there are few customers and they are very expensive to acquire.
When the market for your product is shrinking and there may not be a very large number of new prospects in the market.
In very price-competitive markets, where there may be a few large marketers.

Talbot: These decisions on allocating resources to both acquisition and retention are partly based on the lifetime value of the customer. But LTV is often an elusive metric, difficult to establish with a strong degree of confidence. How can the process of determining LTV be strengthened, particularly when a brand is new, and metrics are in short supply?

Srinivasan: LTV is most valuable when a brand is new because it can guide the allocation of resources to the ‘right’ customer, one who will offer a strong stream of revenues. The computation of the LTV entails assumptions about:

The revenues and costs of serving the customer into the future.
The risk profile of the customer and therefore the discount rate for the customer’s cash flows.
The retention rate of the customer in the future.

These three factors depend on the firm’s investments in products, technologies, and the customer. There is a potential chicken-and-egg problem here. The LTV estimate depends on the firm’s investments in products, technologies, and customer which, in turn, influence the firm’s investments in its customers. So, this is, undoubtedly, a challenge.

There is a way out. Specifically, after the computation of the LTV of a customer, analysts can model the sensitivity of the LTV of the customer to various assumptions about investments in products, technologies, and the customer. A factor that may be useful here is the marketer’s experience in previous generation products which can provide some guidance for modeling the sensitivity analysis.

Talbot: As the nature of brand loyalty evolves, how does this relate to retention?

Srinivasan: There is a straightforward positive relationship between brand loyalty and retention. Higher brand loyalty will result in higher customer retention and higher positive word of mouth. Interestingly, this will also lower customer acquisition costs. This illustrates the synergistic relationship between customer acquisition and customer retention, specifically, that retention benefits translate into acquisition benefits as well.

Talbot: Any other insights on the role of retention in marketing strategy you’d like to share?

Srinivasan: Ironically, despite the benefits of customer retention which have been touted extensively, some marketers still continue to focus on customer acquisition, ignoring customer retention. This is because of the structure of incentive schemes for sales and new business development teams. Sales and business development executives are compensated only when they acquire new customers not when they work to retain existing customers.

Feature Image Credit: null Getty

By Paul Talbot

Minus strategy marketing staggers. I am a somewhat reformed ex-media business executive, with tours of duty at AOL, CBS Radio, and Nationwide Communications. I’m a fan of F. Scott Fitzgerald, the Boston Red Sox, the Principality of Liechtenstein, fried clams, fog, and prices that end in the number 7.

Follow me on Twitter or LinkedIn. Check out my website.

Sourced from Forbes

In News

Want Real Content Marketing ROI? Focus on Content for Customer Retention

August 19, 2019 No Comments

By Bethany Johnson

Back in 2014 — can you believe it’s been five years already? — the marketing world was having an industry-wide internal debate about inbound versus content marketing, and which practice serves the other.

HubSpot, the company that coined the term “inbound marketing,” publicly claimed content marketing serves inbound. The founder of the Content Marketing Institute (CMI) countered by saying inbound is a subset of content marketing.

Here’s what was missing from the 2014 conversation: an awareness of the pressure we marketers felt to prove content marketing ROI in our own departments by year’s end. Many of us had spent precious time, funds, and energy creating content to build awareness and generate leads, handing responsibility off then to the sales and service departments so we could get back to creating more “interest stimulating” stuff to post. Many marketers had largely missed the customer retention power of content marketing.

Today, the conversation has shifted from whether content or inbound marketing is primary to how the two separate but related disciplines can interact and complement each other to generate ROI. To that end, brands are discovering content marketing’s potential as a powerful customer retention tool. Here are just a few of their strategies.

Live and In-Person Events

In sharing his origin story with LinkedIn, Andy Crestodina, co-founder and CMO of Orbit Media, says he first “needed to learn search, and later, content marketing,” signifying a fundamental difference between the two.

That got me. In a world full of marketers who still use the two terms interchangeably, Andy had something to say about the broader capacities of content marketing. Had he too seen content retain customers as well as it had served the goals of search? If so, in what way?

I pinged him to ask.

“This might surprise you,” he began, “live events are an awesome content format for retention. If a good chunk of your customers are in your geography, try creating a live event.”

Sounded logical, of course, but did he have any examples of in-person events actually working? Turns out, yes: He was very familiar with this marketing medium.

“We’ve done a monthly event for nine years. It’s called Wine & Web, and it combines teaching and networking,” Crestodina continued. “The results for both sales and retention have been huge for us.”

Image attribution: Kelsey Chance

Online Communities

Many content marketers praise the LEGO brand for its feature films and publications, which are indeed powerful content marketing examples. But what jazzes the kids I know is the company’s online ideas hub called, aptly, LEGO Ideas. Here, young innovators can submit their own ideas for LEGO sets and vote on the submissions of others, in the hope of someday seeing their own idea on toy-store shelves. The collaboration combined with competition makes for an emotional hook every parent can confirm.

Communities-as-content isn’t a new idea, but targeting those buyers whose hands are already all over your product is a brilliant way to increase content marketing ROI without chasing another new lead gen tactic.

Maximization Webinars and Tools

Personal finance brand YNAB (You Need a Budget) invests heavily in motivating customers to get the most out of their product. Every day, they host small, live, personal online classes that allow attendees to interact in real time with the YNAB rep and fellow budgeters.

Image attribution: Wes Hicks

The webinars are short, so you can squeeze a class into your morning commute or workout. They’re also recorded, which means customers who get interrupted mid-class can catch up later. While the brand may be tempted to route funds to more traffic-generating content, focusing on their customers’ financial success more than pays off (pun intended).

Another prime example of a customer retention marketing strategy is the hyper-relevant information mirrored back to all drivers who use the Snapshot device from Progressive Insurance. It’s a program customers appreciate, as safe behavior tracked through this app is rewarded with sizeable discounts on insurance premiums. This technology also helps to inform marketing efforts through its key insights on customer’s driving habits.

Through Snapshot, the brand enjoys:

Permission to collect and analyze gobs of data
Potential reciprocity of having given a substantial gift ($700 million in discounts to date)
Motivated customers — drivers who have another reason to behave safely behind the wheel
A creative new revenue center. McKinsey consultants recently observed that marketing tech like this can be monetized into its own business unit to (strategically, of course) serve other insurers.

So yes, content can and does achieve the goals of inbound marketing. But content can do so much more to engage, wow, and eventually multiply the people your funnel brings in.

User-Generated Contributions

Customer loyalty programs (think birthday discounts, referral perks, and gamified spending motivators) are great. But how can content play a role in a customer retention marketing strategy? By turning buyers into co-creators, of course!

Tarte Rewards by Tarte, a cosmetics and skincare brand, incentivizes customers to earn online store credit not just by spending more, but by leveraging selfies and social engagement that feature the products they’ve purchased.

Much like how beauty brands utilize influencers, Tarte has empowered its own customers to act as advocates and provide authentic user-generated content. This content is powerful, in that it:

Promotes a product and builds brand awareness when users share their experiences
Builds brand confidence when products are shown on real consumers
Boosts social engagement, as consumers get competitive and creative in showing how they’re using the products
Provides marketing content that’s original, authentic, and visual—often even video-based—which showcases products in the most compelling way
Displays brand loyalty, since buyers are unlikely to invest their own time, energy, and creativity into promoting a product on social unless it’s that good

Keep in mind that the smaller, more intimate following each shopper brings can, when combined, be much more powerful than a disengaged or artificial audience.

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Awards for Customer Retention

Competition as content? You bet. Brand-hosted annual awards are one of the most creative, effective content marketing tactics.

One of the best B2B examples of this is the Life Science Industry Awards, originally initiated by industry publication The Scientist and now hosted by BioInformatics Inc.

The sponsor and its divisions provide research and advisory services to support the life science, analytical instrument, and diagnostics industries. But the firm regularly stops to take the pulse of its voting insiders (all scientists) by polling them to celebrate the “rock stars” of life science product manufacturers and suppliers. A top determinant of ranking in the awards? Customer loyalty and satisfaction. Awards become a means of taking already-engaged customers and making them even more invested in the brand.

The Heart of Content Marketing

Content marketing has evolved far beyond a play to increase brand awareness. Today, we coordinate annual industry awards, conduct live interactive webinars, host forums, personalize mobile apps, invite clients over for wine once a month, and even leverage buyers’ selfies. These are all ways content marketing can serve customers from attraction through to loyalty, and even into advocacy.

Robert Rose of Content Marketing World says getting content to spur customer retention is about more than just focusing at the top of the funnel. It’s about meeting consumer needs—not alienating them once you’ve caught their attention.

“The basis of our content marketing strategy once was how much can we create in order to ‘get found.’ But that’s where many businesses sort of stopped. They didn’t really explore any more deeply what content marketing could provide by the way of marketing insight into those personas or into those customers once they get deeper into the funnel,” he explains. “We know a lot of companies that are amazing at inbound marketing, or the top of the funnel stuff, and they are absolutely horrible at customer retention, and they are churning through customers like nobody’s business.”

Today, many marketers still consider the terms “inbound” and “content marketing” interchangeable. But content marketing achieves dozens of business goals, and inbound traffic is only one of them.

“SEO is a subset of content marketing,” Crestodina stressed in our interview. “Organic search is one of the three big promotion channels for content. The other two are social and email.

“The content marketer does three things (to focus on) all day long: create, promote, and measure,” he says. “Not all content strategies have an SEO component, but most do. Why? Because it’s a very durable source of qualified visitors.”

Empowering your customers to support your brand on social is a home run marketing strategy. But by taking the time to meet with them, either in person or through a live web event, and listening to their needs, customer retention gets a whole lot easier because consumers are always more keen to support a brand that gets them and goes the extra mile.

For more stories like this, subscribe to the Content Standard newsletter.

By Bethany Johnson

Bethany Johnson is a multiple award-winning content marketing writer and speaker. Her work empowers marketers to ditch interrupt advertising in favor of original content that converts passive readers into active followers. Thriving brands like Tom’s of Maine, MasterCard, ADP, Fidelity and the Content Marketing Institute currently rely on Bethany’s fresh style to connect with audiences daily. As a consultant, she combines simple change management principles with her insider knowledge of freelancing to show traditional marketing teams how to flourish in today’s gig economy. For more, visit bethanyjohnson.com.

Sourced from Skyword

In News

How to Use Psychology Principles to Improve Your Customer Retention Rate

July 3, 2019 No Comments

By Syed Balkhi,

The brain plays a crucial role in customer loyalty and the buying process.

Marketing professionals around the globe often think about ways they can bring in new customers. Obtaining new customers translates to higher profits. While that statement may be true, there are other factors that you should consider.

Customer retention is another important piece of the marketing puzzle often left on the back burner. An Adobe study titled, “The ROI from Marketing to Existing Customers Online” revealed that keeping a customer around after their initial purchase is well worth the investment. For starters, an average repeat customer spends five times more than a first-time customer.

Customer retention is just as important as bringing in new customers. I’d like to outline how you can use the human mind to keep customers around long after their first purchase. Here’s how you can use psychology to improve your average retention rate.

Use the fear of missing out.

FOMO, or the fear of missing out, is a psychological trigger and a popular marketing tactic usually reserved for customers when they are browsing online. It is the fear that something is going to sell out due to limited availability. We all have this fear, and it stays with us in our day-to-day interactions. Sometimes you might not even realize it’s happening.

For example, grocery stores will often use this tactic to sell products that they need to get off their shelves. They accomplish this by putting up a “limited stock” of one item, while a similar product may be stacked up right next to the scarce product. Your instincts tell you to go with the item that looks like it’s selling faster because you don’t want to miss out.

You can apply this same tactic to your products after a customer makes a purchase. Usually, the purchasing process involves a customer signing up with their email address. You could tempt that customer to become a repeat customer by offering exclusive ‘limited time’ deals on your products.

Build social proof.

The psychology of social proof ties closely with the fear of missing out. People want to make sure that they can obtain a product or service before it sells out, and this is especially true when they see other people enjoying the product they want.

When you’re designing your website, make sure you include share buttons with counters so the audience can see exactly how many people enjoy what you’re selling. You can also add testimonials, reviews and more.

Combine these elements with active social media profiles where you’re constantly retweeting those who tag you in posts or sharing images on Instagram of people enjoying your product or service. The mentality of the customer is “If they are enjoying that product, I bet I will, too!” This thought process encourages the user to make an initial purchase.

You can also use this method to bring in repeat customers by sharing a wide variety of products and reviews from different customers. If they tried the first product and enjoyed it, they are far more likely to purchase a second product if they see other people enjoying it as much as they enjoyed their original purchase.

Rationalize their purchase.

How many times have you personally suffered from buyer’s remorse? Regardless of whether or not the product was excellent, sometimes we feel bad about spending money. Your marketing team should work to deliver a quality experience after someone buys something from your website.

There are a few different ways you can help customers rationalize their purchase. A good start is to send (or automate) personalized thank-you emails to customers. This small step will ensure that the customers feel like you value them and their business, which can fuel future sales.

Beyond thanking the customer, you can also send them emails with tips and guides on how they can get the most use from their product. If you want to turn heads in your industry, try offering gifts to customers after a set amount of purchases. It’s hard to think about buyer’s remorse when you’re getting additional gifts and have had an overall outstanding customer experience.

There’s no question that psychology plays a role in the buying process. Your goal is to deliver excellent user experiences and encourage first-time buyers to become lifelong customers. As you shape your marketing technique in the future, take some time to think about how you would react to some of your customer retention methods if you were getting emails from another company. When you put yourself in the shoes of a customer, it’s much easier to see how the brain can encourage us to remain loyal to businesses that treat us well.

Feature Image Credit: Getty Images

By Syed Balkhi, founder of WPBeginner

Syed Balkhi is the founder of WPBeginner, the largest free WordPress resource site that helps small businesses start their website.

Sourced from Inc.

In News

The How-To: Capture User Value With Digital Impressions

April 16, 2019 No Comments

By Alex Ionides

Is a banner or blog worthless if it doesn’t lead to a click through? Some would say yes. After all, that click is one vital way that we can measure ROI. But digital impressions –such as ad views or email opens– can hold a great deal of insight.

Here are four big reasons that impressions really count and why they should be considered as part of ROI.

1. Impressions help nurture sales
92% of first-time website visitors aren’t there to buy.
This statistic comes from a 2017 survey by the Global Software Company, Episerver. And it makes a lot of sense. For instance, when we go shopping in the mall we’re not always there to buy. Sometimes we’re just browsing or returning an item.

We mirror these behaviors online. So just because a reader doesn’t instantly buy a product or request services the minute they visit the site or read your blog, it doesn’t mean all is lost. People access online content to do research, gain inspiration, or just find out how much your shipping costs.

Ultimately these digital impressions are exactly what they say they are– they’re a chance to make an impression. A chance to show off a well-functioning website. To have blogs packed full insight and advice. And show prospective buyers that when the time is right they can rely on your business.

How your content marketing can nurture sales: Let’s look at an example. Intrepid Travel is a company that offers adventure holidays. They also run a website called The Journal which supports real traveler stories. In this way they nurture sales by building a rapport with their audience, offering a platform for people to try out travel writing, and also intersperse it with Intrepid’s own content.

2. Impressions improve customer retention
43% of consumers want to have a relationship with the company they buy from’ as per a 2017 report by Adobe in Reinventing Loyalty.
It reveals that marketing isn’t just about having an amazing service, or a highly creative advert which makes people instantly want to click and buy. It’s also about building an experience for the purchaser that talks directly to their emotions and makes them want to return time and time again.

This makes page views and email opens highly meaningful. If past customers are opening your email, it’s a solid sign that they’re still engaged with your brand.

How content marketing can aid customer retention: Take Shutterstock. They analyze their own data to provide a yearly infographic of current download and upload trends. As a content marketing strategy it is useful for their customers because everyone can see what is on-trend and fresh. It keeps customers engaged year after year.

3. Impressions help build your brand
According to Episerver, ‘A personalized experience can increase brand loyalty and brand trust by 20%.’
Every time someone views your blog or YouTube video it builds your brand, and it’s more likely to be positive if that experience feels personal to the user. Through each impression, the customer learns a little bit more about a product or how a service can be used, or just gain useful information about the topic in general. When this is done well, it can feel like every contact with the brand is personal.

How content marketing can build a brand: In the US, JetBlue used a series of YouTube videos to attempt to set them apart from other airlines.Let’s be honest, airlines are often the brunt of our frustrations and complaints. But JetBlue turned many of these on their head to celebrate flying with infants or tackle flying etiquette. For anyone who has flown a lot, these videos feel very personal.

4. Impressions generate new leads
Companies with a blog produce 67% more leads per month than those without one.
The reality is that lots of people aren’t searching for your product or service. They’re searching for a piece of information or advice. Along the way, they discover something that they weren’t aware that eventually leads them to contact your company for more information. It might not happen straight away, but it does plant the seed.

How content marketing can generate leads: Look no further than this article. Maybe you’re reading it because you were researching digital impressions and it came up in a Google search. If this is the case, I hope you’ve seen there is value in improving both the quantity and quality of these impressions when looking to build your brand. I hope you’ve learnt something about how content marketing can help you do this. And irrespective of whether you’re already one of our valued partners, I ultimately hope you’re as impressed with impressions as I am.

Feature Image credit: Shutterstock

By Alex Ionides

Sourced from Entrepreneur

In News

5 ways data and text analytics improve customer retention

January 10, 2019 No Comments

By Agi Marx

Customer retention strategies fuelled by data ultimately influence how your team will approach customers — it’s proven to drive profit. In fact, “executive teams that make extensive use of customer data analytics across all business decisions see a 126% profit improvement over companies that don’t” (McKinsey, 2014).

This is no news. Among 334 executives surveyed by Bain, more than two-thirds said that their companies are investing in data and analytics. And the expectations are high. 40% expect to see “significantly positive” returns, with another 8% predicting “transformational” results (Bain & Co, 2017).

While the intention is there, according to Forrester, “only 15% of senior leaders actually use customer data consistently to inform business decisions” (“The B2B Marketers Guide to Benchmarking Customer Maturity”, Forrester, 2017). So, companies do realize the need for data but expect some sort of magic to happen in order to implement?

“Influencing customer loyalty […] doesn’t require magic, it requires data – usually data that you already have but aren’t using to full advantage. Regardless of industry, most organizations today generate mountains of data. In fact, many customers tell me that they have so much data that their biggest problem is how to manage all the data they have”, says Mike Flannagan, vice president, and general manager of Cisco.

5 Ways Data and Text Analytics Improve Customer Retention

1. Develop a data roadmap and stick to it

As many as 30% of the executives in the aforementioned Bain & Co study said that they lack a clear strategy for embedding data and analytics in their companies. McKinsey’s findings show that taking an integrative approach, meaning seeing analytics as a strategic driver of growth instead of using it in a silo or only as a part of IT, ultimately leads to achieving the desired result (McKinsey, 2014).

Successful companies do two things differently: First, they make use of the data they have. Second, they implement the organizational changes once they understand what the data tells them. So, you have the data – make sure you actually use it and enforce any changes needed in the business to make it happen quickly.

A good approach is to develop a data roadmap and stick to it. Steps that you take within the organization can be to:

Ensure corporate KPIs are automated, scalable and repeatable.
Gather key stakeholders and define the top 3 business problems you want to solve.
Categorize the issues into data vs. systems issues (often you’ll find that the issue is not with “data” at all, but with how people use it or manage it).
Prioritization of tasks is required along with assessing the technical feasibility of your plan.
To stay on track, reassess progress every 3 months.
The human factor – ensure behavioral change

Another key factor is hiring senior executives who take a hands-on approach to customer analytics. Not only do they need to understand the importance of analytics but also have the skills to analyze it themselves, so use this as a benchmark when hiring.

Although 70% of companies have data strategies in place, many will fail to deliver what’s needed due to one factor alone: people. You may have the most advanced tools and excellent data scientists; however, all efforts fail without the correct behavioral changes needed internally to ultimately take action (Bain & Co 2017).

Employees may not be committed to using data analytics, internal teams may not be communicating with each other, or the data solutions adopted aren’t user-friendly. Behavioral change, continuous monitoring of results, along with a “one-team approach” is needed to ensure that advanced analytics within an organization can survive and prosper (Bain & Co, 2017). No surprises here, behavior change being the hardest part of any performance improvement plan and why as many as 38% change efforts fail (Bain & Co, 2016).

2. Only focus on high-quality leads

Customers are less likely to churn if they are similar to your primary target customers. If you have access to data about both your customers and a list of potential customers, this is a great opportunity to focus on only those who are less likely to churn.

How? By applying algorithms comparing the features and characteristics of your customers to those of your potential customers. Those that have similar characteristics (FTE size, annual spend, job title, type of industry) to your existing customers are probably those most likely to want your product, to find it valuable and therefore stick around. Your segmentation now becomes crucial. Each customer segment provides you with distinct features that help easily identify your next customers.

For example, tools like HubSpot provide this type of information in an integrated way, where you can see characteristics and patterns easily.

3. Use machine learning methods to create predictive models

Companies analyze data using different types of analytics, including predictive analytics, which is used to look at the relationships among different metrics.

To create solid customer retention strategies, we can use predictive analytics to make predictions about the future, by looking at historical data, to learn what customers may like or dislike.

Often, you might be overwhelmed by the number of variables you have to manage and analyze all at once. Although you may have a highly skilled data analyst at hand, it’s still time-consuming and labor-intensive to manually and quickly sift through the sheer volume of data to find the optimal predictive model.

To create the best predictive models of retention, rely on the power of machine learning to quickly and accurately uncover the underlying reasons why customers are churning or why they’re loyal to your brand.

Machine learning uses math, statistics and probability to find connections among variables that help optimize important outcomes such as retention. These models are then applied to new customer data to make predictions.

Machine learning algorithms are iterative and learn on a continual basis. The more data they ingest, the better they get. Compared to human performance, they can deliver insights quickly thanks to the processing capability of today.

For example, you can use analytics to identify which up-sell or cross-sell products will be the most relevant based on your customer’s past purchase or browsing history.

Often, companies don’t have employees with high-level analytics (data science) skills. Third party providers can provide a solution that automates data integration and analysis.

4. Get data-driven insights with text analytics

To get deep, data-driven insights, don’t forget to analyze your free-text responses to your open-ended survey questions. If you don’t you may well miss them!

You can do this with text analytics solutions. With a text analytics tool that uses sentiment analysis, it’s easy to spot customer pain points.

And, if you collect lots of data, make sure you actually use it. One study found that only 15% of senior leaders actually use customer data consistently to inform business decisions (Harvard Business Review).

At Thematic, we have developed an AI algorithm that automates analyzing free-text feedback in surveys using machine learning and natural language processing, and in essence, simplified the way businesses are getting insight from their customer data.

5. Segment to focus on retaining the right customers

Using data analytics to segment people into different groups means you can identify how each segment engages with your brand and product. This then allows you to look at each subgroup and draw insights, followed by adopting different communication and servicing strategies to increase retention of your most wanted customers.

Analyze data such as your customer demographics, lifestyle, products purchased by each category and type of customer, the frequency of purchase and purchase value. In this way, you’ll discover which type of customers are driving the most revenue. Some cost too much to deliver revenue, so you’ll know if you want to focus your efforts on.

Understanding the difference between these types of customers, can in some cases make or break a business, especially if you’re just starting out. Knowing customer value is crucial to be able to make critical decisions. You can segment by historical value, lifetime value, value over the next year or the average customer value by segment. Using the right segmentation, you’ll then create highly targeted product recommendation offers. Segment your customers to offer relevant discounts for different channels (in-store, online, mobile). Mix it up a bit, every customer doesn’t have to receive the same offer.

Another useful way to use segmentation is to monitor the time-sensitivity and seasonality of your promotional codes. By monitoring sales data, you can see whether these codes are redeemed more often in the morning or afternoons or perhaps straight after a sales communication. The more you know about what a demographic responds to, the more you can focus on taking the right actions.

Top 3 Tips for Analysis

Gather multiple data points to be able to make relevant recommendations.

Be pragmatic and avoid making assumptions from solely one piece of data. Because someone living in California buys winter boots doesn’t mean they want to be bombarded with similar product suggestions. Maybe they bought them for their sister who lives in Chicago!

Leverage social proof where you can.

If your customers don’t respond to certain products, maybe all they need is a little reminder that others similar to them are using them and are happy with them. Pull in positive testimonials from surveys and social media comments to your marketing communications and website.

Remember: it’s the ability to swiftly translate insightful data into concrete action that counts.

It’s a fact: better data means better results. If you don’t have good data now, you can test your way to better data. Just by improving your internal data collection, you can often arrive at better data. In other cases, you might have to purchase better data. Good data is not static, it’s a continual process of observing, acting and learning.

Finally, the challenge of the vast data volume that large businesses have, is also the opportunity. Bringing together structured and unstructured historical data across organizational silos, and combining it with key data about ongoing customer interaction provides a compelling opportunity to influence customer experience in real time.

This article was published here first.

By Agi Marx

Sourced from Digital Doughnut

In News

How to Stop Your Customers Breaking up With You

March 6, 2018 No Comments

Whether your customer decides to call it quits overtly, or silently goes away, this study will tell you what to do to stop others ditching you in the same way.

By MediaStreet Staff Writers

Companies invest billions each year in expensive customer service programs, sales forces, and sophisticated discounting programs such as Groupon. This is all to lure and retain customers, but they are shocked to realise that “churn” remains one of their biggest and most expensive challenges. (Your churn rate is how many people are leaving you over a specific period.)

According to a new study, customers have a tendency to send clear signals before they “break up” with a company. But to catch it before it happens, you have to know what to be monitoring, and the key to any relationship remains effective communication.

The study was co-authored by Eva Ascarza and Oded Netzer of Columbia Business School, and Bruce G.S. Hardie of London Business School. It is unique in that it is one of the first to analyse “hybrid” settings, where customer could leave the service either by cancelling their account/unsubscribing or by stopping to interact with the service. As a result, firms operating in these settings, face two different types of churners: “overt churners,” who inform the firm about their disengagement with a company; and “silent churners” who tend to fade away more quietly simply by not making repeat purchases.

The authors analysed customer behaviour in two different (hybrid) contexts: a daily deal website and a performing arts organisation. They separated overt churners from silent churners to understand and predict both types of churn and then explore possible levers to better manage the customer base.

“We have consistently found that overt churners tend to interact more, rather than less with a firm prior to disengaging with that firm,” said the authors. “This means that they will open emails they receive and read communications from a company, but it can be a mistake to assume that simply because a customer is engaged, he or she is satisfied and will not leave.” In turn, the research found that while overt churners may engage with the firm by opening emails and reading them, they rarely click on links in the emails, which suggests that the content is not perceived as valuable to them.

“We have found that once a customer transitions into the “silently gone” state, the firm is highly unlikely to reengage the customer using previously used communication methods,” said the authors. “However, a more proactive and customised communication reduces the possibility that certain customers will leave silently”.

So there you have it. The trick is to intervene before they leave you to nurse your broken heart.

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In News

Could Social Media Be The Ultimate Customer Service Channel?

January 19, 2018 No Comments

Could social media be realising its true calling as the ultimate customer service channel?

By MediaStreet Staff Writers

According to a new study released today, overall satisfaction is highest when customers ask questions or make requests via social media.

The study was conducted by J.D. Power, surveying people who were customers of mobile network operators. Said Peter Cunningham at J.D. Power, “Personalised feedback, rapid-fire response time and interaction with live humans are some of the primary factors driving the highest levels of customer satisfaction with customer service. And, increasingly, customers appear to be finding that formula through alternative channels such as social media. That doesn’t mean call centres and brick-and-mortar stores are no longer relevant; in fact, personalised assistance via phone, app and face-to-face are still critical to customer satisfaction.”

Following are key findings of the 2018 studies:

• Social channels will become front line for customer service

Among customers who ask a question or make a request, overall satisfaction is highest in the social media channel (838 on a 1,000-point scale) and the app channel (835). By contrast, overall satisfaction scores average just 797 among customers who handle these requests on the phone with a representative.

• The human touch still matters

Satisfaction tends to be much higher when customers use a channel that provides personalised feedback. For example, assisted care satisfaction is 26 points higher than unassisted care satisfaction (819 vs. 793, respectively), and satisfaction is 824 among customers who ask their question in the store channel vs. 797 among those who speak with a rep over the phone. Additionally, among customers who ask a question or make a request through their carrier’s app, overall satisfaction is 845 when they think they are interacting with an actual person vs. 800 when they think the system is automated.

• Video plays a key role

The channels with the highest first-contact resolution incidences are online videos (92%) and mobile app to research information (90%). Among customers who view an online video from their service provider, 34% say they “definitely will not” switch to a new carrier in the next 12 months vs. 21% among those who use the phone automated response system.

• Not-so-immediate gratification via email

While social, app-based and face-to-face customer support are prized by consumers for their personalised, rapid response, the average customer service response time via email is 32 hours.

Could Social Media Be The Ultimate Customer Service Channel? Soon, perhaps, it may be the ONLY service channel.