A sound customer retention strategy is the primary solution to customer churn, making it the safeguard of sustainable growth for any company.
The objective of customer retention marketing is to maximize the number of those who stay with your brand. Pavlo Kravchenko, Local Enterprise Relations Unit Manager at GMS, shares some best practices on how to increase your customer retention rate.
Most enterprises are aware that customer churn (also referred to as customer defection) hinders business growth and puts revenues at risk. And yet, many researchers, including Forrester, call 2018 the year of “reckoning” for companies overlooking the customer retention strategies in favor of insatiable customer acquisition.
This is proving detrimental to a surprisingly substantial number of companies with as many as 30% expecting to see continued decline in customer experience (CX) performance. In turn, this trend threatens not only staggering business growth but also a 25-50% increase in revenue risk.
Why spend time on customer retention, if I can attract new ones?
Cost-efficiency: Retaining a customer is 6 to 7 times cheaper, according to Bain & Company.
SMS and Viber messaging campaign helped GMS client MAXICARD win back lost customers and urge them to spend around $108,000 in the partner’s network. Sharp-cut audience segmentation, proper communication channels, and hard-to-resist offers allowed MAXICARD to bring back almost 4% of customers considered lost.
According to statistics, around 10% of customers simply forget about the brand. Remind them about you, it will definitely not ruin your budget but bring results.
Future prospects: Customer retention will be in even more focus in the foreseeable future. Persistent ads, an abundance of competing services to choose from, and overall informational noise are already taking their toll on customers. Increasingly more people will attempt to filter it.
Focusing on lowering the customer churn and improving CX is the smart alternative high-performing marketing professionals will choose; in other words, customer retention will be made a priority.
“Only 18% of companies prioritize customer retention, according to Invesp Consulting. I hope your company is among them.”
Fierce competition: With the comparable quality of services, a company that makes each customer feel valued and understood will tip the scales in its favor over a competitor neglecting them.
In banking, for example, fintech companies are quicker to exploit open banking and this brings pressure and so it is crucial for companies to replace or disintermediate those banks that are too slow to take advantage of open banking. And there are more than 50% of such incumbent banks.
Only 18% of companies prioritize customer retention, according to Invesp Consulting. We hope your company is among them. In case you’re not sure whether you’re getting the most out of your retention strategy, here’s a quick tip on how to calculate the customer retention rate (CRR):
S = total number of your customers at the start of a period;
N = number of new customers acquired during this period;
E = total number of customers you have at the end of this period;
CRR = ((E – N) / S) * 100
Got less than 100%? Think of improving the situation.
Improving your customer retention rate by as little as 5% increases profits by 25% to 95%.
How to improve customer retention: best practices
Learning how to improve customer retention rates is the first step on the fast track to sustainable business growth.
Global Messaging Services (GMS) has extensive experience in the communications industry and the necessary tech expertise to implement top-of-the-line digital marketing tools. So we are sharing the customer retention best practices which we have found to be effective in today’s fast-paced, hi-tech communications environment.
Make it personal. Again, customers want to feel understood and valued. Fulfill this desire, and you will win their loyalty. Conversely, service ratings plummet when people feel they are being ignored or rushed.
“They know my tastes so well”, “they really get me”, should be the sentiments your customers experience when you reach out to them. And, of course, target your mobile advertising better: tailor your communications to appeal to your audience rather than annoy.
“They know my tastes so well”, “they really get me” should be the sentiments your customers experience when you reach out to them.”
Make it engaging. A big part of the problem with customer churn is that people don’t feel heard. Their feedback is not implemented, their calls remain unanswered. Be open to your audience, make yourself easily reachable, engage them in a dialogue, listen to their opinion.
Make it catchy. Given how much information we filter daily, it takes an effort for a brand to stand out from the sea of competitors, drab communications and entertainment. One way is to establish your brand’s featured presence by using Viber stickers: they can be offered in any language and can have audio, can be static or animated, even clickable.
Make it appropriate. Choosing the right communication tool (or a combination) is essential. GMS’ cost-efficient multichannel messaging platform Hyber takes this communication strategy to a completely new level: Push Notifications, Messengers, SMS Messaging – you choose what works best for communicating with your customer, and we deliver.
Many customers prefer receiving information in the messenger app they favor. A tool like shortcodes can be the most effective solution for voting, authentications, surveys, reminders, and urgent communication. Banking sector and retail can take advantage of 2FA (two-factor authentication) to offer customers a convenient and secure way of authorizing purchases and transactions.
Make it live longer. The way Hyber delivers messages allows for the most reliable, cost-efficient communication. By default, we prioritize push notifications as those bosting highest click-through rates and cheapest to deliver. If Push isn’t delivered, Hyber will turn to Viber. If the communication cannot be delivered even through Viber, we will deliver the message via SMS.
Based on our research, we suggest increasing the TTL (time to live) for transactional messages from the standard 15 seconds to at least 60 seconds, and advertising ones to 24 hours.
This has proved to maximize efficiency and reduce the cost. The advantage of using our Hyber platform for these communications is that GMS controls the entire message delivery chain and will optimize the delivery to be most reliable and cost-efficient: you only pay for the messages successfully delivered.
In an age where customer attention is so divided, there is no place for inefficient communications. We are here to optimize your customer retention marketing strategy and help you make the most of your communications to secure the sustainable growth of your customer base.