Having a healthy business is about more than the new customer coming in the door. It's also about retaining the customers you already have.
This makes sense as Bain & Company research found that increasing customer retention rate by just 5% can increase profits by 25 - 95%.
And when acquiring a new customer can be 5 - 25x more expensive than retaining an existing one, it's critical to invest as much time and resources in keeping existing customers as in closing new ones.
While the best companies build love between customers and their brands, we define retention more realistically as whether it is easier (and convenient) to stay or leave. An example of this is Apple. People love Apple products, which is excellent from a retention and loyalty perspective. On the flip side of the Apple equation is how difficult it is to leave their ecosystem. This goes beyond just trying to move your contact list. If you've bought any products from the Apple AppStore, none of those investments will transfer over to Android. Think of this 'easier to stay or easier to leave' dynamic as the Yin and Yang of retention and loyalty.
Colby Tunick
Invest in customer experience software
Creating a fantastic experience starts with the systems and processes you have to enhance your customer's experiences. A good question to start with is: how do you make it easy for customers to get their questions answered? Software, specifically a well-implemented customer experience (CXP) portal, makes life easier for your customers and your employees.
Colby Tunick
The other important factor is what consumers want. And what they desire, across demographics and industries, is a self-service experience. The importance of this only increases if you are targeting those under 40 years of age. So if you have not yet invested in customer experience software, you are missing an essential tool to easily retain customers.
Find Friction (and remove it)
Consumers hate friction in their experience. So work to remove it. Quickly, friction in their interactions with your brand builds dislike - and if the emotion you are working towards is love, friction is your worst enemy. If you are not already, start keeping track of the common themes that run through customer support inquiries. Once you notice a trend, take action to eliminate them across all of your customer's experiences.
Customer experience is critical to loyalty. Those that have a great experience stay longer, while those that don't will start shopping for alternatives. By removing "friction" in your processes, you're making it easier for the customer to say 'yes.'
Areas where you're being measured against your competitors (e.g., high visibility,) such as onboarding and billing, are high-priority processes to remove friction for your customers. Otherwise, you are pushing your customers to switch to competitors.
Ask what went wrong
We all want every customer experience to be unique. But at scale, creating a personalized experience for everyone is difficult. Don't just focus on the good. Ask the people who churn why they left. You may need to financially incentivize them for this information (such as entering their information in a gift card raffle,) but the monetary cost of that compared with the benefit of gaining insight into your customer's experience significantly outweighs it.
Some customer churn is inevitable. So when you lose a customer, follow up with them. The surprising thing is that most companies don't. And among the ones that do, they don't record it in a way that they can report on. It may also surprise you how willing people are to tell you what went wrong in their experience with your company. This information will allow you to improve and increase retention and loyalty across all your products and services.
Set standard response times
No one likes to waste their time. Something universally reviled is waiting on hold or submitting support inquiries that are not responded to. Put an end to this by setting standard response times for your team. As part of this, make sure that customers know how they can reach you whenever it is convenient for them. If they would rather text with support, why are you making them call?
Leverage Customer Data
Boosting retention is difficult if you don't know who will most likely leave. Artificial Intelligence and machine learning allow you to leverage the customer data you already have to pinpoint which accounts are most at risk to churn. This allows your team to provide additional value-added services where applicable and increases the likelihood of retention.
This data can also target customers with relevant products and services. And when we say relevant, we mean something that truly interests the customer. If your retention is something like 'treating every account the same,' put an end to that practice. Sending consumers information irrelevant to their situation is a great way to get ignored. And if they ignore you, your company is one step removed from replaceable.
Conclusion
Retention has transformed over the last two decades. Whereas before the internet, it was difficult for customers to find your competitors, now they can find alternatives to your products and services at the first whiff of dissatisfaction. Keeping your customers starts by caring - about their wants and needs.
The ultimate retention strategy is to become a customer-centric business. If you don't know where to start on this journey, just ask. You'd be surprised how much your customers care about your business, and they will identify the roadmap. In following that path, you will increase your retention by providing greater value to your customers.
