Businesses spend a lot of time and money acquiring each customer. While acquisition is undoubtedly important, it costs up to seven times more to gain a new customer than to keep a current one!
With that in mind, why don’t businesses simply work harder to keep the customers they already have..?
Here’s part of the problem: Customer loyalty has declined dramatically in recent years. Today’s consumers think nothing of buying from a different store every week.
In the past, all you needed was a decent service and a convenient location to keep customers frequently returning. Well, those days are long gone…
To retain customers in today’s hyper-competitive, digitally-focused business environment that moves at speed, you’ll need preparation and effort – plus a few tricks and tools up your sleeve. And if you need any further convincing “Just a 5% increase in customer retention can boost profits by as much as 125%!”
If you’re looking to better retain your customers (and this should always be a goal) — begin with these five powerful concepts, listed hereafter. Understanding and applying them will mean greater returns and equally lower costs for your company, no matter your industry.
Concept #1: Genius Gamification
If you’ve ever tried to pull a teenager away from a game console (or pull yourself away) — you will likely have heard the phrase, “Just one more level!”
By nature, once you start a good game — it’s pretty hard to stop.
That’s because games are designed to reward you as you continue playing. You earn badges, unlock higher levels or receive tokens you can exchange for in-game purchases. The more you play, the more you win.
Forward-thinking brands have been applying these concepts to their businesses for many years now. Why? Because rewarding customers for reaching new milestones in the customer journey is a very effective method to keep them coming back for more.
This technique is known as gamification.
The image below provides some stats on gaming hours— but just look at that shiny yellow button — TED has gamified their site to encourage participation and the consequent reward of regular users:
So, how can you use gamification in your business?
Isolate particular milestones you want your customers to gradually reach in aid of your bottom line. It may be a certain amount of time on your subscription plan, trying a new product, a higher tier of service or experimenting with a free trial – anything, really.
Next, create a well-planned value system. It could be badges, credits, coins or something similar — but make sure it’s not too superficial. The whole idea is to make your customers feel special and rewarded, not manipulated or like they are victims of a gimmick.
Attach your rewards incrementally to the milestones in such a way that bigger achievements yield better rewards. I highly recommend creating a public-facing leaderboard to show which users have unlocked the most benefits, introducing an element of friendly rivalry.
Here are some tools for you to try now:
One of the best referral marketing apps out there — perfect for affiliate, influencer and advocate programs.
A lesser-known tool, but simply amazing for running hugely-gamified competitions (using public leaderboards and smart sign-up processes).
This potent customer relationship management platform does just about everything — but one of its most important features is the ability to build leaderboards in conjunction with sales gained — all visualized in your very own, vibrant dashboard.
Concept #2: Precise Personalization
Everybody likes to feel special. We seek out and remember brands who make us feel valued as individuals.
Much like the human need for instant delight fulfilled by gamification, the desire for personal appreciation is an important insight for any business looking to improve customer retention.
If you make people feel wanted, they’ll usually stay. If you don’t, they usually won’t.
“68% of customers who ‘leave’ brands do so because they feel the brand was indifferent toward them.”
So, how do you make people feel special?
Simply beginning your marketing emails with “Dear [Customer Name],” just doesn’t cut it in today’s world.
Personalization needs to extend into the bones of your business. It should be a primary goal to provide customers with as much control over their experience as possible.
Personalization can (and should) stretch into:
Essentially: Every stage in the customer journey should be as personalized as possible.
That doesn’t necessarily mean you should have the customer’s name on everything. You don’t want to be creepy!!
What it does mean is you should make the effort to transform everything in your current marketing and sales processes so they are perfectly relevant to your consumers.
In this age of data collection and advanced software, it’s relatively easy to learn your customers’ tastes and preferences. The trick is discovering how to apply that knowledge.
Personalization should be akin to a waiter — always present, but never drawing attention to itself.
When properly executed, personalization helps customers build a solid relationship with your business. They’ll feel valued, understood — and they’ll return, as a direct result.
Here are some tools for you to try now:
Optimove
Optimove offers a sleek suite of tools that enable robust and highly-personalized retention marketing. Using machine learning and predictive analytics, the Optimove platform provides granular segmentation and a powerful execution platform for super-personalized customer communications. With a recent $20M funding round, the impact of Optimove is clear!
Evergage is unique in that it offers web personalization — in real time. The tool uses machine learning to greet visitors with an experience that’s tailored to them, on-the-fly.
Visual Website Optimizer
VWO is an amazing conversion optimization platform that allows you to physically alter your website at scale, in direct response to how your visitors are navigating it (whether effectively or ineffectively).
Concept #3: Super Subscription Plans
As I said earlier: Customer loyalty is declining rapidly, mainly because there’s been a seismic shift in what it actually means to be a customer. In the past, you’d walk into a brick-and-mortar store each time you needed to buy.
This meant it was easy to develop face-to-face relationships with small business owners — but it also meant buying goods could be somewhat of an ordeal. Every time you ran out of milk, you had to run up the street.
All that changed with subscription models:
Newspapers and magazines realized they sold more copies when customers paid a yearly or monthly price to have them delivered to their doorstep, rather than relying on newsstands for sales…
Companies like Costco took the concept one step further by charging a membership fee just to get access to their products. BUT: They made it wholly worthwhile by guaranteeing valuable benefits to their customers.
Since then, dozens of major companies have shifted over to the subscription model. Cloud-based software companies are an obvious example, yet the trend extends to food, clothing and even cosmetics.
When it comes to customer loyalty, the obvious benefit of the subscription plan is that you don’t need to worry whether your customers will come back next week…or next month.
You know their subscription fees will be rolling in, regardless.
Subscription plans also allow you to develop longer-term relationships with your customers. You can collect more data and learn about their highly-personal preferences.
As a result, you will vastly improve the personalization of your service.
Loyalty plans are a great opportunity for gamification, too – do you notice a theme here? These concepts work best when combined.
Here are some tools for you to try now:
In order to work effectively, subscription-based businesses need a robust website back-end. Cratejoy helps small-to-medium businesses set up such websites with the functionality to succeed – and they’re usually much more affordable than hiring a dedicated web developer.
Chargify is an advanced subscription management tool that allows you to streamline every stage of the billing process. It provides solutions for user onboarding, self-service and email communication — without the need for complex coding.
Zuora is an even higher-tier, full-service subscription management platform. When you need to manage hundreds or thousands of recurring payments, Zuora has the capacity to do it.
Concept #4: Clever Content Marketing
Customer retention is all about forging relationships. Because a business can’t realistically sit down with each person and have a conversation, you need to find creative ways to interact with customers and built trust at scale.
Content marketing is one of the best ways to achieve this.
What is content marketing? Well…
In a nutshell: Audiences got tired of traditional, outbound tactics forced upon them and indirectly demanded to be educated instead.
Consequently, marketers created “content” which they knew their customers would find interesting and began publishing it as fast and as broadly as they could.
Content is a vague term; it can mean just about any form of communication:
- Blog posts
- Articles
- Infographics
- Videos
- Podcasts
- White papers
- Presentations
- Social posts
- Photos
You get the idea…
Once you publish enough exceptional content that informs and educates, you start to build a trusting, engaged audience. Even when content isn’t inherently promotional (content marketing) — it raises brand awareness, drives traffic and indicates that you’re an authority in your field.
Content that ISN’T promotional is far more powerful than promotional, ‘megaphone’ content. If it wasn’t, I wouldn’t be here writing this 2,000+ word piece, right?!
It’s definitely a good idea to deploy a tasteful combination of content types…
By engaging your customers with a steady stream of relevant content, you create a positive brand perception. Most importantly: Frequent, awesome content ensures that your business is always first-in-mind.
Hubspot and Ford are masters of this technique.
Use content marketing to educate and build relationships with your audience. If they really understand your business, they are likely to come back —often!
Here are some tools for you to try now:
This award-winning content management platform takes you through every step of the content process — from creating material, to publishing and engagement.
Percolate allows you to manage and track your content across multiple channels. Its clean interface makes content scheduling a walk in the park!
Curata manages the content marketing for some of the world’s biggest companies: Cisco, JP Morgan and Symantec, to name a few. Fortunately, you don’t need to have a Fortune 500 company to gain value from their system.
Concept #5: Elite, Exclusive Products & Superior Service
The final trick for promoting customer loyalty is simple: Make sure they can’t get your stuff anywhere else.
It may sound manipulative to the cynics out there — but this really is the most effective way to guarantee the return of customers. If they have nowhere else to go, what choice do they have?
With companies like Amazon and eBay so firmly established, it’s extremely difficult to be the cheapest or most convenient retailer. These behemoth brands have already taken that space in the market… So, you need to think differently and position your offering in a unique way.
If logistics make exclusive products impossible, you still have many options. Consider presenting some kind of special feature — a better warranty than anyone else, or a privileged customer service plan…
Even a luxury, higher-tier offering where customers pay good money for an amazing experience.
Expand your way of thinking — there are *always* cool tricks you can deploy to hack market positioning.
Whatever you choose, just ensure your audience and customers are at the top of your agenda.
Let’s circle back to Emmet and Mark Murphy’s findings: a commitment to ‘customer experience’ results in up to 125% more retention and revenue than outdated once-and-done sales or marketing approaches.
Here are some tools for you to try now:
Zendesk is software that helps you turn interactions with customers into meaningful relationships. It grants you control over almost every element of customer service.
Olark is one of my favorite live chat platforms. In addition to connecting you with customers via an intuitive conversation interface — it also provides additional insights on their journey through your website — so you have extra context to hand, as you engage!
Freshdesk is an alternative customer service platform to Zendesk. I don’t know which one came first, But Freshdesk makes it equally-easy for you to swiftly respond to customers and make them feel well-looked-after.
Wrap-Up
If you aren’t already working hard to retain the customers you have — start now.
A famous rule of business dictates that 80% of your future sales will derive from 20% of your current customers.
Although it’s more difficult than it used to be, retaining customers is still possible – and the benefits for your business will often be dramatic.
When successfully applied — concepts like gamification, personalization and exclusivity will always keep your customers coming back for more.
In alignment — sweet-spot content marketing and subscription-based models will build strong relationships, while harmoniously encouraging loyalty at every turn!
Naman Modi
December 11, 2018
This article is very nice and helpful for people like me who are new to this field. Thank you for taking out time to write this article