Back in 1990, Bain & Company, working with Earl Sasser of Harvard Business School found that increasing customer retention rates by 5% increased profits by 25% to 95%. Fast forward 25 years and Gartner group tell us that 80% of your company’s future revenue will come from just 20% of your existing customers. Consistently retaining customers is proven to be key to profitability and growth. When you combine this with the wealth of data generally held on customers there is no excuse to treat your customer retention program as secondary. In fact it’s an opportunity to do some really interesting campaigns that zero in on insight and driving response.
Technology is your friend here:
Data analysis gives you the power to understand who your customers are, what they’re buying, in what order, when, how, how they like to be communicated with, what life stage they are in. Pulling all your data together can give you some really powerful insight that can inform your communication plans and identify drop off hot spots. Tools in your arsenal are:
- Single customer views – to get a true picture of how many customers you have, your long term customer value and identifying your “best” customers
- Data mining & predictive modelling – breaks down your data to identify patterns and related variables and predicts future behaviour based on past interactions.
- Understand buying behaviour, Identify customer journeys and highlight action points – solidifies the patterns discovered into cohesive behaviours and different journeys. Each journey will have specific places where relevant communications can either encourage positive behaviour or discourage negative behaviour to improve overall profitability
- Segmentation – once customer journeys & behavioural patterns are identified, segmentation of your database will help you communicate with your customers in a more relevant way.
- Automated trigger based communications – driven directly from customer journeys, communications can be automated to react immediately to customer behaviours that are deemed trigger points to either optimise a purchase or reduce drop off.
Automated customer optimisation strategy:
Once you’ve identified your various customer journeys and key behaviours that indicate either drop off, opportunities for growth or reduction in activity you can build a communication plan to tackle each trigger. At each stage your campaigning plan needs to reflect what your customers want to hear, at the right time for them and via the right channel. It might end up looking like an impossible task to manage. Different messages going out at different times via different channels can be daunting, but automation makes all things possible.
Data flags can drive content, offers, images, format, channel choice, timing… well anything really – combining flexible artwork templates with a library of images (product or lifestyle), a selection of offers and text can make individual communications unique. A personal communication is much more likely to cut through the noise and make your customers sit up and take notice, while enhancing the overall customer experience. If you’re relevant and timely you can drive loyalty or turn a potentially negative situation into a positive one. We’ve seen a recently implemented automated customer retention program improve retention rates by over 34%! Talk to us about your retention challenges, get in touch here.