How to create a great customer retention funnel
Growing your business and increasing your customer base is essential for staying afloat. However, if you give a closer look at your numbers, acquiring those new customers may cost your business 4 to 10 times more than retaining and nurturing the exciting connections.
- Gartner goes as far as saying that 80% of your company’s future profits will be generated by just 20% of your existing customers.
- According to another research conducted by Bain & Company, increasing customer retention rates by just 5% can increase revenues by 25% to 95%.
Yet, customer loyalty these days is hard to achieve, especially among the millennial consumers with shifting opinions and preferences. Your main goal here is to establish an effective retention funnel and here are the tips for that.
Gain The Customer’s Attention First
It’s hard to deliver a message when the person isn’t paying attention to you in the first place. Hence, the first step is to establish an effective communication channel with your consumers and make them listen to what you are saying.
There are a couple of good strategies to help you with that:
Stand Up For a Common Cause
According to a survey conducted by the Corporate Executive Board, 65% of consumers cited shared values as their primary reason for loyalty to a certain brand.
So what does your company stand for? Do you have a clear brand message that communicates your primary values? If not, you should start working on one.
There are a few different routes you can take in this case:
Choose to support a social cause, which resonates with your target customers like Tom Shoes does for instance. In fact, their powerful brand message immediately strikes the user straight from the website.
Opt for absolute transparency, which lately became another massive purchase decision driver among the millennial consumers. Up to 94% of consumers say that they’d act more loyal towards a brand, which promotes complete transparency and, what’s better, a lot of people are ready to pay more for complete disclosure of ingredients, manufacturing/handling conditions etc.
If you are not yet ready to publicly disclose all of your inner operations, you can start with being more transparent about the product quality and reviews. In fact, a lot of companies are already succeeding by clearly listing the pros and cons of the sold goods e.g. mattresses and delivering unbiased reviews to the consumers.
Back up statements with social proof and in this case, we are talking not about exaggerated and hard-to-verify statements like “this smoothie contains 34 vitamins your body needs”, but flesh-and-blood testimonials from peers.
Brands with high retention rates know how to utilize user-generated content to their advantage; highlight and share examples from their community and convert frequent shoppers into product evangelists and net promoters.
Re-Investigate Your Selling Points
If your customers don’t enjoy the selling process, they are unlikely to return for another purchase. Hence you may need to analyze your current sales funnel and pay special attention to the following cues:
Customers should feel compelled to start doing business with you again. And you shouldn’t feed them with constant perks and discounts for that. Instead, you can pick some ideas from the “frugal wow” technique, which entails making small, cheap, yet highly appreciative gestures for your clientele.
Analyze Your Checkout Form
Are they adapted for repeat customers? Do you store the details they provide and offer a quick and simple path to update those if needed?
Don’t forget about the mobile shopping experience as well and make sure that purchasing goodies through your app or mobile website is as fast and easy as through the desktop version.
Personalization is Highly Important
Again, with repeat customers, this one is simple to achieve, especially if you are using big data to scope their preferences and analyze their shopping patterns. Even small gestures like calling them by name via email and writing occasional quick emails to solicit their feedback counts towards making their experience with you feel more personal.
Level Up Your Customer Support
Of course, creating a tribe of loyal brand fans is impossible without having a great customer support team covering your back. Here are a few essential points to dwell on:
Speed Can Be Secondary To Quality
Providing immediate generic reply via chat or picking up the phone and putting the client on hold, while one agent is connecting them to another won’t win you more affection. And there’s data to prove the point. According to Gallup Group, customers are 9 times more likely to get engaged with a brand when the provided customer support was evaluated as “courteous, willing and helpful”, rather than plainly speedy.
Choose The Right Support Channels
Take the time to survey your customer's preferences. Do they reach out more on social media or over the phone? Are emails better over live chat? Different support channels suit better to different businesses, hence you need to establish the one that works well both for you and the customer. After all, offering visual customer support via Snapchat can be speedy and innovative…unless your primary audience is 35-55 years old.
At the end of the day, the customer is always right. And it’s your choice to persuade them that continuously entrusting your brand with their money is the right decision for them.