Churn is an unavoidable part of every business. Not all first-time customers are your target audience but you should make it a priority to keep every customer engaged from their first interaction, and especially after their first transaction. You need to identify and focus your attention on your best customers. Once you’ve identified your target audience, it’s easier to market to them and formulate strategies specifically designed to attract and engage these customers.
According to SVP of Growth Erin Raese, Annex Cloud has observed churn rates from 60 to 80% in retail and travel, even higher in direct sales. If you’re facing an increased attrition rate, you need to detect it at an early stage and investigate the possible causes. It could be due to insufficient customer support and service or product quality, all of which can be easily remedied. However, if a lack of loyalty is causing the churn, you need a data-led strategy to understand which behaviors lead to loyalty.
Data is at the heart of identifying when and why your customers churn. Having a unified customer profile that all customer-facing teams can use is essential to serving up relevant, timely communications and offers. Knowing your customers at a deeper level requires collecting data directly from customers across their journey.
Today’s average consumer is quite vocal about their preferences. Regularly monitoring reviews and feedback across various platforms and third-party review sites can give you great insights into your customers’ preferences and mindset. Collecting this data as well as your personally generated reviews and feedback data will help you recognize recurring issues and customer concerns that eventually lead to customer churn. Remember engaged customers provide more feedback, and the more feedback, the better.
Customers are becoming more demanding of the people and organizations with whom they do business. But when they trust them and are fully engaged, they:
Buy 90% more frequently
Spend 60% more
Are 5X more likely to indicate exclusive loyalty
Source: Rosetta Consulting
Engaged customers spend more and tend to stick around. Keeping customers engaged between purchases, across their entire journey, gives you on-going opportunities to add unique value you know matters to them and they can’t find anywhere else.
According to Forbes, customers switching brands due to a poor customer experience costs U.S. companies $1.6 trillion. A Gartner survey shows customer experience will overtake price and product as the key brand differentiator. Today’s consumers want the same personalized experience whether they’re interacting with your brand in-store, online, or on their mobile device. Make sure you’re able to recognize and reward customers across every touchpoint.
The best way to ensure customers stay connected and interact with your brand for a prolonged period of time is by nurturing and fostering loyalty. By creating a mutual value exchange, loyalty provides the opportunity to have an on-going conversation with your customers, keep them engaged across their entire journey, reward them for that engagement and specific behaviors, and build lasting emotional bonds.
Loyalty is a two-way street. Customers are sharing their personal details in exchange for you using their data to improve their experience. On the flip side, the more your customers know about your brand and your products and services, the more connected they become and the more confident they’ll feel about purchasing from you. Education is a way to stand out from competitors, and also gives you the opportunity to reward customers for taking advantage of things such as how-to videos, mini workshops, quizzes, and more.
We all want to be a part of something greater. Strive to build a community of your loyal customers. Reward customers for joining, maybe even make your VIP community exclusive to higher loyalty member tiers.