There has never been a better time in human history to be a consumer. Options are plentiful, reviews accessible, and businesses are working harder than ever to please.
This has bred a promiscuous consumer: users hop from service to service, loyal only to those that provide the best in simplicity, service, and value. It’s actually normal for apps to lose 80% of their customers. Retention curves look like the steepest skate ramp imaginable. And these unfaithful app users don’t just stop by churning; they tell all of their friends about any negative experience too.
All hope is not lost, though. If anything, these picky, app-bouncing customers are providing companies with a huge learning opportuntity.
Research shows that there are several ways to restore virtue to your users and inspire loyalty.
1. Create Value Across the Board
Craft a customer value proposition: Your value proposition states why customers should want to do business with you and those attributes that set you apart from the competition. An effective value prop can help guide every business decision you make.
Listen to feedback and adapt: Apple is famous for creating innovative products that consumers didn’t even know they wanted—but now can’t live without. How does Apple do this? Every day, they are listening closely to what their customers have to say – which explains their exceptional Net Promoter Score. Ask your users for what they want, and incorporate useful feedback into future product updates. It’s also good to ask for feedback within your app, before users have the chance to post any negative feedback in the app store.
2. Engage Your Users on a Personal Level
Personalize user communications: Engagement does not mean a bi-weekly, mass email—that only reinforces customers’ feelings that they are not being valued individually. Customer engagement begins with personalized communication. Your engagement strategy should start with three basic steps:
- Discover who your customers are.
- Segment them by their needs and behavior.
- Determine what message you want to send to specific user groups.
Engaged customers generate 1.7 times more revenue than normal customers, so personalization definitely pays dividends.
Create and distribute targeted content: Next, create and distribute content aimed at each of the segmented groups you have created. Your content should be relevant to your target audience and ideally generate interest in your product. Copyblogger provides some great ideas to get you going:
Once you have curated relevant content, try out new channels of communication like in-app messaging, social networks, and push notifications to share.
Don’t be afraid to experiment and learn which channels different customers prefer. Even something as simple as adding a customized salutation to email lists builds a relationship and creates an added level of familiarity.
3. Provide Top Notch Service for Your Customers
Treat your customers like they matter: In the hypercompetitive world of mobile commerce, customer service has become a crucial differentiating factor in providing value and meeting customer needs. And it is important to note that customers cut ties with business for two primary reasons:
- They feel that they were treated poorly
- They had a problem that was not solved in a timely manner
American businesses lose an estimated $83 billion in sales each year due to poor customer service. Obviously most businesses don’t set out to treat their customers badly, so why does this disconnect occur?
Usually, because there is a lack of communication.
This can be combatted with an effective customer service strategy that eliminates barriers to engagement, serves customers in an efficient and effective manner, and creates trust and satisfaction. These barriers can be reduced by offering multiple channels for communication (letting your customers decide if they want to self-serve or live chat), providing customer service on whatever channel the customer is on (if they are on mobile, have an option for in-app chat), and updating your customer through every step of their journey (if there is a wait for a chat agent, send an automated message letting your customer know how long they have to wait).
4. Maximize Your Magnetism
There’s A Lot of Competition Out There: Apple estimates that there are currently 775,000 apps available in their app store with Android options not far behind. Positive reviews, press releases, and promotions are extremely effective ways of increasing awareness and boosting download numbers.
5. Engineering the Default User Behavior
Continually Optimize Your CX: Create a frictionless onboarding experience by reducing the number of decisions the user has to make. In the age of instant gratification, the path of least resistance is usually the most travelled. Dan Ariely, a behavioral economist and author of the book Predictably Irrational, offers an example of behavioral shortcuts and elaborates on the psychology behind this point. In his study, he determined that the consent rate of organ donors in different countries was heavily reliant on the design of the form at the DMV.
In countries where the default choice was to opt-in to the organ donation program, consent rates were very high. And in countries where the rate of consent was low, people had to check a box to give their consent.
Be The Behavioral Mastermind: The idea here is to design your app to make the decisions on behalf of the consumer so that they don’t have to. Lead them through the primary workflow and guide them in creating value—both for themselves and, ultimately, your business.
Lemon Wallet, a popular digital wallet app, recently streamlined their user onboarding process with default behavioral psychology. When opening the app for the first time, consumers are funneled through a process to upload a card to the app. It doesn’t matter what kind of card, but it got them on their way to building a digital wallet.
Prior to this onboarding experience, consumers were left to explore their app on their own. Cole Mercer, from Lemon, recently shared with me that this small change netted the company a 57 percent increase in customer retention.
6. Social Media Alone is Not a Community
Building A Community Takes Resources: You have customers, and most of those customers use social media. This alone does not mean that you have a customer community.
A customer community is where your business and its consumers can interact and bond over their commonality. Starbucks created an online community built around improving the ‘Starbucks Experience’ at My Starbucks Idea. This not only encourages users to become more passionate, but it provides the company with a valuable communication channel.
- Learn more about your customers and what they want
- Communicate new offers to your most valuable users (but don’t use this as an overt sales platform)
- Provide an additional customer service channel
7. Create Passionate Users
Find Your Advocates: Passionate users are a catalyst for growth. They’ll generate excitement about your product and inform their friends.
You’ll sometimes hear these users called evangelists. They’ll spread the word about what sets your business apart from the competition. They’ll convert others and make believers out of them, too.
Building an online community encourages these types of users and can lead to far greater buzz. This is the reality of Web 2.0 and by creating a forum for your acolytes to gather and share ideas you can encourage these promoters as well.
8. Lock-in Said Users
Prioritizing Retention Is Fiscally Responsible: It is generally accepted that existing customers are more valuable than potential ones, thanks to high new user acquisition costs. Forbes estimates that it costs six or seven times more to acquire a new customer than keep a current one.
Existing customers hold several key advantages over prospective ones— they’ve already bought into your concept and they are far more likely to do business with you. So retention through excellent customer service should be an absolute priority.
As clichéd as it sounds, it is crucial to go above and beyond customer expectations.
9. Acknowledge Mistakes and Unearth Complaints
Try Proactively Listening: It’s not doing anybody any favors by pretending that customer complaints don’t exist. Eighty percent of companies are convinced that they provide a superior customer service experience, but only eight percent of their customers would agree. So it’s important to listen attentively in regards to what the business is doing wrong.
But listening is only half the battle. Many complaints need to be exposed. Some customers will take the time to share their dissatisfaction, but the vast majority will simply defect to a competitor.
Only four percent of unhappy customers will voice their complaints. Ninety-one percent pack their bags in the middle of the night and leave.
It is important to solicit complaints by making sure unhappy customers have an easy method of registering them. Even casual, offhand remarks can contain valuable customer insight. Listen carefully and try to anticipate customer needs.
Then make sure to address the problem quickly. More than half of customers expect a reply to their service email within 10 hours. This is not an easy benchmark to achieve, but it is possible.
Here’s How: Customer Relationship Management (CRM) software can be used to monitor individual customer habits. In the early days of CRM, only the largest corporations could afford implementation. However with the rise of SaaS CRM, this option has become increasingly attainable for SMBs.
In addition to customer support systems, CRM software can also manage sales, marketing and even social media communication. Some help desk solutions are narrower in scope than traditional CRM platforms and are generally less expensive. Their offers vary and provide options like online ticketing software, feedback enablement, online help chats, knowledge base and FAQ creation, and SDKs that offer support desk and data collection capabilities.
Different methods of providing technical assistance require different support strategies. Regardless of the method, customer support must be accurate and to the satisfaction of the user.
A customer who has had their complaint resolved quickly will return for repeat business 70 percent of the time.
Final Tips and Tricks
Use push notifications: Once an app has been downloaded, push notifications permit developers to engage their customers at any given moment. This intimate level of communication can double retention rates after six months.
However, if push notifications don’t provide any value to the consumer they can be ignored – or because of their intrusive nature – viewed as spam.
Allowing customers to personalize the frequency and content of their notifications creates a better experience. Designing highly specific and targeted push notifications for different audiences in different time zones creates an even better one. Brent Hieggelke, the CMO of Urban Airship, offers some fantastic suggestions for push notification best practices.
Monitor app engagement: Years ago, developers had to rely on custom forms and digital comment cards for customer usage data. Now, there are a number of mobile analytics tools that track who is using an app and how.
These services provide insight into a number of statistics that can be used in all facets of business strategy for determining your app’s end-to-end value. It’s especially beneficial to track the following:
Demographic data to find out who is using your app and…
- Recognize new market opportunities
- Assess the success of current marketing efforts
- Describe current users to investors
Acquisition and retention data to track key stats like clicks, installs, and in-app purchases in order to…
- Maximize marketing ROI
- Define user quality
- Determine acquisition cost through various channels
- Monitor advertising campaign success
Usage data to create a full picture of how users interact with your app complete with…
- Screen views
- Session duration
- App launch frequency
The Bottom Line for Increasing Customer Loyalty
We’ve covered a lot of ground in this post, but as competition in the mobile arena escalates, maintaining competitive advantage is becoming increasingly difficult. These insights should help you to wrangle users and convert them to loyal followers, but there’s one last point to share on promoting habitual usage as a crucial component of increasing loyalty.
Life360, a family communication and location tool, discovered a method for staying close to users and delivering daily value. Rather than rest on their laurels and just allow users to message each other and monitor their children’s whereabouts, Life360 went above and beyond.
The app sends crime updates based on each user’s location. Not only is this a personalized and contextualized service, but it encourages habitual use and breeds loyal users. Itamar Novick, Product VP at Life360, recently told me that they were able to increase re-enagagement by 300 percent using these personalized updates.
It’s having that full 360 degrees of customer experience, if you will, of predicting and personalizing around customer needs, seamlessly delivering upon them, and promptly following up on feedback that will provide that highly-coveted loyalty.