Any business has three main goals – build leads, generate sales, and create a network of loyal customers (aka customer retention). While companies focus on lead generation and sales, to build a thriving business, it’s essential to focus with laser precision on their most valuable asset – the customers. While no one is disputing the importance of the lead generation and sales machinery, the fact remains that by reducing churn and focusing on existing customers, businesses can increase their profits by 25 to 95%. According to a SAS and Loyalty360 survey, 68% of business comes from existing clients. And this makes sense because a 3% monthly churn amounts to 31% annually. According to another study, it is 9X less expensive to retain existing customers than to acquire new ones. It is hardly a surprise then that for 56% of SaaS companies existing customer renewals are a high priority.
Clearly, in a software economy that is becoming increasingly competitive by the day, customer retention has to be a heavy point of focus. But does customer retention have to be a herculean task? How can product companies ensure that their customer retention strategies are future-ready and robust? Let’s take a look at some easy to implement customer retention strategies for product companies
The onboarding experience is perhaps one of the most determining contributors to good customer engagement.
The customer experience in Week 1 determines if he/she will continue to remain a customer by Week 10 and onwards. From taking the customer from familiarizing themselves with the product to establishing usage patterns, to making the product an indispensable tool in the life of the customer – all can be driven heavily by onboarding.
Driving hyper-focused, contextual, personalized, always on, anywhere-anytime, onboarding experiences become drivers of customer retention as it helps establish see value in the product in week 1 itself.
Product companies do not have much time to create an impression on their users. They have to move with the objective of creating ‘Wow” moments in the customer’s journey.
However, how can they achieve this if customers are not assisted in this journey? Organizations need to help customers by enabling self-service and providing proactive contextual recommendations when they need it in a device-agnostic manner. This not only deflects the high-cost interactions costs but also provides the user with more control.
Today’s users need highly contextual and personalized training experiences. To drive customer retention, these customers need to be given the right guidance exactly at the point of need.
Organizations need to create and deploy rich and interactive content and have in-built engagement tracking metrics for detailed insights into product effectiveness. They also need to enable microlearning, allow effortless self-service so that the users find what they need faster, create clear user segmentation for better personalization, and automatically collect feedback to identify areas of improvement.
Your customers need their voice to be heard. Even if they might be speaking in a whisper.
Having access to complete, clean, contextual and correct customer data helps organizations determine how the customer is using the product. This is ‘Implied Feedback’. Organizations also need access to clear and explicit customer feedback in the form of surveys, feedback forms, NPS surveys etc. as well as have insights into the implied needs of the customer and then incorporate that in every product decision to drive loyalty and retention.
Things need to be extremely comfortable and convenient for the customers.
With many contributors to customer success such as the product engineering team, the marketing, and communications team, the finance team etc., creating proactive engagement can become a challenge. This also demands the customer to shuffle between tools to get a job done. What the customer needs is effortless, two-way communication with all the stakeholders of customer success and remove any communication ambiguity.
Customer retention also depends on how you manage change as the product evolves and grows. Having an in-app, omnichannel approach ensures that customers can be notified of changes via multiple channels, and the right and contextual guides can be delivered to them where they want it.
With insights into user behavior, organizations can send in the right recommendations in the product itself to ensure that the user is able to navigate the change in the product features or functionalities easily.
Continuous customer engagement is the key to reduce churn and drive customer retention. However, with many contributors to customer engagement, it becomes essential to orchestrate all the main contributors to customer success to give the best product experience to the customer. Every single time.
This can be achieved by enabling in-app product extension as then organizations do not need to ask the customer for information regarding the product. In-app product extension ensures that the product experience is improved by analyzing the user’s behavior and thereby drives customer engagement and ultimately retention.
Gaining insights into customer sentiment and their usage and behavioral data helps in identifying areas of improvement and pain points.
By gaining access into real-time user behavior with actionable analytics reduces the problem resolution times. By measuring the activity within the product, organizations can understand and re-engage their users by arranging one one-on-one personalized engagements at scale. These efforts contribute significantly to customer retention.
Continuous customer engagement can also be driven by enabling multi-channel communication.
This works as a solid retention strategy as organizations then get the flexibility to push all relevant messaging to the users within the product and the website. This communication can also be accessed in a device-agnostic manner to extend communication with the user.
Customer retention happens when organizations create continuous customer engagement – whenever they want it and however they want it.
This can only happen when the organization has clear visibility into customer sentiment. This can be achieved with the help of real-time insights into customers usage history, surveys, and feedbacks as well as insights gleaned from demographic behavioral and event data.
Along with this, organizations have to ensure that as the product grows, they enable personalization and scale together. It is quite apparent that enabling manual intervention at scale with the sophistication today’s software products need is a tall order and could lead to failure. Organizations, therefore, have to enable AI-based Business Process Automation that uses complete customer data to drive both personalization and scale.
In our next blogs, we shall be taking a deep dive into these elements and see how they impact customer engagement and influence customer retention.