What does customer loyalty mean to you? In a world where nothing is normal, and consumers are willing to switch providers at the drop of a hat, loyalty can be the difference between a business’ success or failure.
What are you doing to earn your customers’ loyalty and, subsequently, boost your customer retention? Perhaps the first question to ask is: do you know what your customer retention numbers are?
Here’s a nifty infographic from HubSpot that might help:
Retention is the number of customers that have continued to use your product over a period of time, and it shows how valuable and essential (“sticky”) your product or service is in the eyes of your customers. The more loyal your customers are, the stickier your product is, and the better retention you will have. In this blog post, we’ll break down strategies to boost your stickiness, heighten customer loyalty, and nail your customer retention goals.
Know your churn signals
Do you know the signs that someone is about to churn? Being able to predict when a customer will leave is arguably the most valuable information that you can have in the fight to impact retention and loyalty. When you know why customers leave, you can be proactive about getting them to stay.
If you don’t already send a churn survey to customers who have cancelled, that’s the first step. Ask them why they’ve left so you can prevent other customers from feeling the same way.
Beyond that, though, take a look at any trends you see from customers in the time before they leave. Identify actions that most or all churn cases take in the months leading up to their churn. Then, start to automate communication around that.
For instance, assume that you noticed customers pause purchases or subscriptions right before they churn. To automate a response to this, create a list of all your customers, and a list of everyone who has purchased within the past few months. Then, compare the lists to find only the people who haven’t bought from you in the last three months. Send these customers a re-engagement email to see if there are reasons that they aren’t purchasing from you, or what you can do to help.
According to Marketing Metrics, the success rate of selling to existing customers is 60-70%, but success rates for new customers are only 5-20%.
Catching churning customers before they leave is one of the best ways to retain and encourage customer loyalty.
Give loyal customers special offers
Scientists say that surprise is valuable for our brain health. Surprises are also pleasurable and keep us on our toes. Rather than waiting for your customers to ask for treats, you should surprise and delight them. People love to get gifts and rewards, especially when they aren’t expecting them.
If you have a CRM or relationship management software, your company is in a great position to do this—you can view a customer’s purchase history and track your most frequent buyers. You can use this data to determine what kind of purchases they make and increase your relevancy by providing offers that are interesting to your customers.
You can also always offer an overall discount to all existing customers, like this one from MeUndies:
It’s not as personalized as targeted coupons, but deals for existing customers to invite their non-customer friends are a great way to give back to your current community while also expanding it.
Listen to your most valuable customers
Beyond providing perks to frequent buyers, there are also your most valuable customers to consider. The rewards you offer for large-scale purchases should be slightly different and more targeted than those you provide for frequent buyers. After all, your biggest customers may only make up 12 to 15% of your customer base, but they represent 55 to 70% of your sales. One way to reward your top buyers is by giving them a direct line to your C-Suite to voice their opinions.
A customer advisory board is a group of customers who regularly join the company to share insights and advice. They are a great way to build relationships and loyalty among valuable enterprise customers. The board members are often high-level executives that can provide useful insights for your company and product team. It makes customers feel valued, and it helps your company provide exactly what your customers want. It’s a win-win.
Onboard your customers and provide ongoing education
The best thing you can do to keep your users using your product is to empower them to become super users. Nothing compels people to keep going like becoming really, really good at something.
This chart shows what your retention looks like without onboarding:
And this is what it looks like with it:
Onboarding makes a 15% impact on retention in just the first week. That 15% boost results in 50% more users retained at the 10-week mark, and that’s only with user onboarding.
With ongoing education opportunities, you continue to keep your customers engaged and excited. Take, for example, You Need a Budget’s strategy: despite being software designed for budgeting, they call themselves an “education company” first, and even have a whole Learning tab on their website. They know that keeping users engaged and educated is the best way to keep them around.
Find your values and broadcast them
Values are becoming increasingly important to consumers. Being transparent and honest about which values you care about and espouse will make it easier for your customers to align with you and support your brand.
Of all current buyers, 73% are willing to spend more money on products that align with their values—especially sustainability. Ensuring that you are vocal about the things you care about is an excellent way to cultivate loyalty.
For example, LEGO chose to invest over $150 million in 2015 and 2016 to make its product more environmentally-friendly and had it’s best fiscal years of all time. What you do doesn’t need to be as significant, but showing your customers that you care about the same things they do is a great way to align and commit to their needs.
Ultimately, the best way to earn the loyalty of your customers is to show them you care. On average, 20% of customers are lost annually due to a lack of relationship with companies they are buying from. You don’t need any excuses to be kind. Treat your customers like you would treat a family member or friend:
- Reward them and give them gifts.
- Know the things that irk them and the things they like.
- Provide them with guidance when they need help.
- Find the things that you share in common.
With this kind of treatment, you’ll be trusted by tons of loyal customers in no time.
Which practices has your business put in place to impact your customers’ loyalty? Let us know in the comments!
Comments and Discussion