How to Overhaul Your Customer Retention Strategy for the Modern Consumer
We all know the conventional wisdom: it costs 5x more to acquire a customer than to retain one. Given this, improving and maintaining positive relationships with your customers is probably a major priority for your company. Your customer retention strategy is what you put in place to improve your relationship with customers and incentivize them to remain customers, whether that means repeated purchases or renewed subscriptions.
Ideally, your customers don’t just shop with you. They also evangelize your brand vocally. The more you can please your customers, the more they’re willing to help promote your brand to their peers.
But today, customer expectations are increasingly elevated, so customer retention strategies are forced to step it up, too.
Customers Are Getting Harder to Please
Across the board, customers are getting harder to please. As a broad-stroke indicator, the overall Contact Center Satisfaction Index (CCSI) is currently 68 out of 100 — down 3% from 2018 (according to CFI Group). The exact CCSI percentage varies from industry to industry, but banks, insurance companies, health insurance companies and more are all feeling the pressure to do a better job pleasing customers and to create a stronger customer retention strategy.
Millennial customers, now the largest single consumer group in the U.S., are unfortunately the hardest generational demographic to impress. They also exhibit less discretionary spending than previous generations. Because of this, they’re less likely to respond to advertising than prior generations.
To impress your customers and hang onto them, you have to go the extra mile with your customer service.
How to Get Picky People to Stick Around
Your customer retention strategy is closely linked to your customer service efforts. Here are four things to consider when assessing your customer retention strategy and identifying areas that could use improvement.
- Deliver what you promise.
When it comes to phone-based and self-service customer support interactions, HBR research shows that “loyalty has a lot more to do with how well companies deliver on their basic, even plain-vanilla promises than on how dazzling the service experience might be.” (source)
When customers’ expectations aren’t met with your product, service, brand, or any other element of their experience, it sabotages your customer retention. You can use your customer service channels to quickly course correct and get to the root — and solution — of the problem and rebuild trust.
- Create an open line of communication.
One of the most poorly performing drivers of customer satisfaction is the old-school IVR model of customer support. The CCSI of this driver dropped 7% in the last year alone. People are tired of having to go through automated phone systems to reach a customer service agent.
Allowing customers to contact you within your app or via other messaging formats gives them additional ways of interacting with your company — ways they feel increasingly more comfortable with. The more ways customers can reach out (and get a quick response), the more heard they feel, as long as their information is carried from channel to channel and they don’t have to repeat themselves!
- Solve customer problems quickly.
We hear a lot about trying to “delight customers,” but according to HBR, if you’re trying too hard to be delightful, you might be missing out on what really builds brand loyalty. “Delighting customers doesn’t build loyalty,” says HBR. “Reducing their effort — the work they must do to get their problem solved — does.”
When all of your customer service channels are integrated on a consistent technology platform, you can better track customer issues and resolve them across channels. A customer might start in web chat, but ultimately resolve an issue over the phone. They shouldn’t have to start from scratch when they switch agents or formats. Integrated digital customer service reduces the work the customer has to do to get a problem solved, and the time it takes.
Because it enables customers to contact you in the moment, in-app messaging in particular is great for improving your CSAT. As a general rule, brands that use in-app messaging see an average CSAT of 4.1 (35% higher than email).
- Design your customer retention strategy around brand experience.
People don’t just buy a product. They buy the experience of your brand. That’s why so many people are willing to pay so much more for brand names. It’s also why customers are willing to pay up to 18% more for luxury and indulgent services if it includes a great customer experience.
Digital customer service is one of the best ways to ensure a better all-around customer experience. Giving customers options for how they contact you caters to the individual preferences of different types of consumers.
For instance, asynchronous messaging enables customers to interact with you on their own time across channels. It’s a convenient, contextual and effective mode of communication for your customers that mimics the organic experience they’re used to when communicating with friends by text and other types of messaging.
A Customer Retention Strategy That Starts with Customer Service
According to at least one survey, the #1 reason businesses proactively invest in and manage customer experience is to improve customer retention — 42% of businesses say it’s more important than customer satisfaction or increasing up-selling.
If your company is looking to give your customer retention strategy a boost, request an advance copy of Helpshift’s State of Customer Service Automation Report. It will help you better understand what customer service KPIs you should strive for, along with insight into the modern customer service landscape.