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Strategy

What to Look For in Your Customer Data to Maximize Retention

Data collection is a given. We all know it's important. But without really knowing what to look for and how to use it, it won't really make a difference

Ben Jacobson
February 20 2018

On the surface, using available data to inform your marketing strategies might seem like nothing but cold, hard science. But when you know how to find meaningful insights in all of those ones and zeroes, you can unlock game-changing opportunities. Sure, you can collect information at scale, but by knowing what to look for, you can also gain insights that customers don’t even realize about themselves – let alone tell you in traditional research interviews. By periodically hunting for the right patterns and anomalies, you can essentially create a bottomless mine of opportunities for your brand to retain customers.

Based on how they already interact with your business and products, you can create a customized set of best practices to optimize your product and brand touchpoints, keeping people happy and loyal. Not sure how to go about that process? Here are a few customer data buckets to examine, along with notes on how they can help you design a best-in-class customer retention strategy.

Mine Demographics from Loyal Customers

When leveraging data to optimize retention, perhaps the best place to start is the wealth of demographic information you have available on your most loyal customers. Consider looking at attributes like:

  • Geographic location, age or gender
  • Company size, industry or vertical
  • Business model
  • Job title or salary bracket

Hopefully much of this information can be found in your CRM. If it can’t, then you might want to consider investing in some service integrations that can automate contact enrichment and import transactions. What patterns and qualities do your most loyal customer profiles have in common? You can uncover simple trends, such as which industries certain products are most popular in, unrealized use cases within a customer’s business, and more. Say you notice that your customers from the hospitality niche end up spending three times more money with you over the years and order two times more frequently than your customers in other fields.

That tells you that these are the most important customers to keep, and that you’d do well to design a customer experience and retention strategy focused on that industry’s challenges and needs. Depending on how you execute the messaging, if you wave the flag that your brand specializes in serving the hospitality industry, you run the risk of turning off prospects from other categories. But there’s also a good chance that you’d come out ahead, because you’d more effectively attract the types of customers who are most likely to stay with you the longest.

For example, Sandra Lewis of virtual assistant agency Worldwide101 looked to her data to help identify her “ideal” customer and decided to pivot her brand altogether, doubling down on catering to that persona “demanding founders and executives.” Worldwide101’s churn rate has decreased by 50% as a result, and the company is free to focus on their best customers without being distracted or dragged down by poor fits.

Identify Long-Term Success Events

Beyond looking at demographic information, you’d do well to also examine how long-term customers interact with your brand over time. You can segment them based on how they interact with different marketing messages or channels, as well as your actual product. Many experts have lauded Mixpanel’s value in this regard, as the insights can be fully automated once you connect the platform to your various data sources. Which actions or events do your top-spending and longest-term customers have in common? How does a successful customer interact with you and your product?

When you know the answers to these questions, you’re able to guide all of your customers towards those actions at key junctures. Prompting people to use your product over time can go a long way, especially when the prompts speak to opportunities that are specific to them. For example, instead of sending email digests of straight empirical data like similar SaaS companies do, retargeting platform AdRoll also includes actionable suggestions.

Image source: https://clearbit.com/books/data-driven-marketing/customer-retention

This drives users towards specific actions that AdRoll know customers could take and increases the value of the product for the customer, making it easier to justify continued business with AdRoll.

Look at Customer Communication

Look at both qualitative and quantitative data from support interactions and other communications throughout the customer lifecycle. When and why do customers reach out for help? When and why do they just give up and churn instead? By studying their behaviors and asking for direct feedback, you can identify customers’ roadblocks when using the product.

You can also see where to make enhancements before something becomes a roadblock. The idea here is to answer customers’ questions before they even start to wonder. In this sense, it can be effective to integrate tips and prompts within your actual product that optimize and smooth out the customer experience, removing those stumbling blocks.

Image source: https://gobackpacking.com/flightfox-review-save-money/

Here’s a poignant example from Flightfox, an air travel deal hunting service that used to rely on crowdsourced deal hunting “contests” but has since changed models. In a case study from Vero, we can see that Flightfox used data to identify a stumbling point in their signup funnel.

They found that customers who dropped off in the contest creation process were opening re-engagement emails, but they weren’t clicking through. The Flightbox retention team created a new format for the re-engagement email, experimenting with FAQ-style packaging that made it easier to address people’s doubts. As a result, the conversion rate on these triggered emails doubled to an impressive 3.6%.

Measure Different Customer Cycles

Looking at purchasing behaviors and patterns, you can find cycles in your customers’ lives and industries that impact how and when they’re more likely to buy from you again. Some trends will be seasonal, with a very predictable purchasing pattern based on outside events like holidays or quarterly budget cycles. Others will depend more on how customers use your products and the behaviors associated with them. Knowing those behaviors allows you to cater to or facilitate them in your retention marketing.

Identify any associated events or behaviors as “starting points” or triggers for your retention tactics. HP offers a program for customers that makes it easier to refill ink cartridges directly from the company, enabled by sensors that trigger transactions when supplies start to dwindle.

Image source: https://instantink.hpconnected.com/us/en/

HP’s solution can be customized to an individual customer’s behavior patterns and is exceptionally effective because it removes virtually all friction from the return purchase experience.

Use Data to Read Minds

Don’t get distracted by your customer community as a whole. Pay the most attention to the 20% of them who are most valuable to you. Use data to focus your retention efforts, maximize your impact and keep the right customers coming back. Your customer data is a look into their minds. You can, and need to, put that knowledge to use. You can win a customer over for life with a few strategic wins, but it takes smart analysis to find the opportunities.

 

 

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Ben Jacobson

Ben Jacobson is a marketing strategy consultant who specializes in content, social media and influencer marketing for B2B firms. He contributes regularly to publications including MarketingLand, Search Engine Journal and the Orbit Media blog.

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