Why do some of your customers stick around, and some don’t? How do you get more of them to stay? According to Gartner Research, 44% of CMOs spend 30-50% of their annual budgets on customer retention and loyalty. That’s a decent chunk of change, so why doesn’t this investment always pay off? In this post, we’ll tackle the reasons why customers churn and offer some strategies that brands can employ to prevent customer churn. Join us, won’t you!?
Let’s start by taking a look at some of the common reasons why customers churn:
It is no longer enough to send a one-off message on a single channel – marketers must continually adapt to channels in which customers will respond, which varies by customer. You have to understand your customers on a 1:1 level across all channels. You have to analyze the gaps in the customer experience, and identify data that best reflects each customer’s relationship with your brand to provide every individual with the ultimate experience, as that individual defines it.
So, how can brands overcome these challenges? Here are five ways that brands can prevent customer churn.
Step 1: Achieve a single and dynamic customer view
Without doing this, you can’t even get to the next steps! As we were saying earlier, customers expect you to engage them on a personalized level, and if you fail to do so, out the door they go. By pulling your customer data from all channels (email, POS, mobile, web, etc) and appending it to a single profile, you can now understand how each of your customers have interacted with your brand, and in turn provide them a unique experience. Which brings us to our next four steps…
Step 2. Use your data to provide better experiences and more personalized rewards to keep happy customers happy
Now that you have a clear view of your customer, it opens your door to deliver a hyper-personalized experience that keeps them coming back. For example, you can leverage that unified data to deliver cross channel campaigns through the most relevant channel of communication, whether that be email, SMS, in-app, or push, for high value behavior. Reward customers for their loyalty without discounting actions they would’ve taken regardless. Incentivize the purchase of a new item to increase order size. For example, deliver an offer for half off a scone redeemable with purchase of a medium sized coffee. This way, you’re listening to them and their habits, but also providing an unexpected reward and increasing check size.
Step 3. Use your activated data to recognize when customers are at risk
The beauty of having your customer data unified in a single place is that it is essentially a centralized repository of all customer interactions, campaigns results, and any data points on how your customers are impacting your business, like their frequency, monetary spend, risk of churn and customer lifetime value. Have a customer that usually purchases 3 – 5 times per week, but hasn’t made a purchase in the last two weeks? Your unified customer data should recognize their normal pattern of behavior has become disrupted, and that they are at risk of churning. Send them an offer for $10 off their next purchase, that is only valid for the next 10 days, for example. Also, don’t forget about those loyalty members. Send an offer to your loyal customers who haven’t made a purchase in 30 days to keep them active!
Step 4. Understand who your most valuable customers are (go above and beyond for them)
Use your unified data to see who your most loyal consumers are. Notice you have some customers that come back more than others, and spend a lot more money and time with you? Treat them with a little extra love by sending them exclusive offers to sales, private events, new store openings. Making your current customers feel special, and constantly engaged will keep them around, and decrease the chance of them churning. A side benefit of this is that by understanding what your best customers have in common, you can implement strategies and campaigns to attract more customers like them.
Step 5. Deliver exceptional service
Have you ever called into a customer service line and they have no idea who you are, your recent purchases or other history with the brand? Us too, and it’s frustrating. For example: if I called customer care from my car in the parking lot of the storefront about an issue I had with a product and then walk into the store with the same problem, the customer care person at the store should be aware through some technology that I had just called customer care. For most brands, that particular situation is not possible. Rather, many times, it’s a new engagement; it’s a continually frustrating experience. However, with that unified view of the customer, brands can move to a world where the individual on the phone can actually introduce you to the customer care person who’s going to be made available within 10 minutes in-store. That individual will be aware of your problem and ready to help you. Reducing that latency by providing all the right people in your org access to customer data will allow you to fuel better customer engagement.
Complete step one, and the next four will follow when it comes to preventing your customers from churning. If you’re interested in learning more on how you can actually put it into practice, give us a ring. At SessionM, we specialize in Customer Data Management, Data Activation & Engagement and Data Driven loyalty; exactly what you need to prevent those customers from churning! Request a demo today. We’d love to help!